Zscaler (ZS) stock tumbled after the cybersecurity firm reported fiscal fourth-quarter earnings, revenue and billings that beat estimates but fiscal 2025 guidance underwhelmed investors amid big changes in its sales organization.
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“Zscaler delivered a good finish to the fiscal year with a beat across the board while fiscal 2025 guidance was a bit mixed,” said RBC Capital analyst Matthew Hedberg in a report.
At Jefferies, analyst Joseph Gallo said in a report: “Fiscal Q4 billings growth of 27% versus consensus 24% was overshadowed by first half 2025 guide of 13% year-over-year…Guidance justifiably amplifies competitive and total addressable market penetration questions.”
Reported after the market close on Tuesday, Zscaler earnings rose 37% to 88 cents a share from a year earlier on an adjusted basis. Revenue climbed 30% to $592.9 million, the San Jose, Calif.-based firm said.
Zscaler stock analysts expected earnings of 70 cents per share on sales of $567.5 million.
Also, fiscal Q4 billings rose 27% to $910.8 million, compared with estimates for $892.5 million.
Zscaler Stock: Guidance Underwhelms
For the current quarter, Zscaler said it expects revenue of $605 million at the midpoint of guidance, versus estimates of $603 million.
For fiscal 2025, which starts with the current October-ending quarter, Zscaler forecast EPS of $2.84, well below estimates of $3.33. Zscaler predicted revenue of $2.61 billion, slightly below estimates of $2.62 billion.
On the stock market today, Zscaler stock fell 14.8% to 164.49 in early trading.
Zscaler has brought in a new chief revenue officer, chief marketing officer and other top sales staff as its go-to-market strategy undergoes big changes. Analysts have lowered consensus estimates amid the sales organization overhaul.
Heading into the Zscaler earnings release, the cybersecurity stock had retreated 10% in 2024. Also, ZS stock had a Relative Strength Rating of 69 out of a best-possible 99, according…
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