Zscaler (ZS) Plunges 15% After Forecasting Q4 Revenue Below Estimates Amid Competitive Pressure

Zscaler forecast fourth-quarter revenue below Wall Street expectations on May 26, 2026, sending shares down 15% in extended trading. The cloud security provider projected revenue between $875 million and $878 million, missing the consensus estimate of $878.6 million, according to LSEG data. The company faces intensifying competition from larger rivals like Palo Alto Networks in the Secure Access Service Edge (SASE) market, a fast-growing segment combining networking and security. Third-quarter revenue rose to $850.5 million, beating estimates of $835.4 million, but operating expenses surged 25% to $687.5 million. Zscaler expects adjusted earnings per share of $1.08 to $1.09, above the $1.03 estimate.