Zscaler (ZS) Earnings: EPS Beat, Revenue Beat, But Stock Drops on Cautious Guidance
Zscaler reported a strong earnings beat with revenue and EPS both topping estimates, but the stock fell after hours as investors focused on cautious forward guidance and leadership changes.
STOCK ANALYSISAI STOCKS
Table of Contents:
$ZS Earnings:
Zscaler just reported a solid quarter, but the market is clearly pricing the guide, not the beat.
$ZS beat on both top and bottom line: Q3 EPS came in at $1.08 vs. $0.80 expected, and revenue was $850.5M vs. $835.5M expected. The stock still got smoked to ~$146.82 after hours because management sounded prudent on the forward setup, flagging sales leadership changes and a more cautious outlook into next year. So the message from the tape is: the quarter was good, but the Street wanted stronger forward confidence.
This is a post-earnings gap-down into a major reset.
My read: bears have the edge right now until ZS reclaims 150 and proves it can hold.
$ZS Long Setup:
Bull case:
Bulls need to prove this is a post-earnings overreaction and not the start of a bigger de-rating.
Bull trigger:
Reclaim 150.05–150.47
Better if it can hold 155.00
Stronger confirmation if it starts reclaiming 162.87 and then working back toward the prior close.
Bull targets:
155.00
162.87
173.79
182.37 if this turns into a full gap-fill squeeze.
Bull thesis:
The quarter itself was not bad.
EPS and revenue both beat.
If the market decides the selloff was mostly about conservative guidance and not a broken business, ZS can grind back hard.
Bull invalidation:
Lose 146.00
If 143.03 goes, the bounce thesis gets ugly fast
$ZS Short Setup:
Bear case:
Bears have the cleaner hand right now because the stock gap-down says the market is not forgiving the guidance tone.
Bear trigger:
Failure to reclaim 150
Break below 146
Confirmation if 143.03 breaks
Bear targets:
143.03
141.56
Then the chart can stay heavy and keep bleeding toward lower support zones if the market decides this is a full reset.
Bear thesis:
The report may have been fine, but the guide and tone are what matter.
When a high-multiple growth name gaps this hard on an earnings beat, that usually means investors are worried about forward acceleration, not the just-reported quarter.
Thin after-hours liquidity can exaggerate the move, but it still shows where the pressure is.
Bear invalidation:
Strong reclaim of 150.47
Then a push back through 155.00
Disclaimer: This article is for informational and educational purposes only and is not financial advice. Always do your own research and manage risk carefully.
$ZS Trading Plan:
If I were trading ZS off this print:
Aggressive long: only on a reclaim of 150.05–150.47
Cleaner long: if it reclaims 155
Aggressive short: on failure back below 146
Better short: if 143.03 breaks and doesn’t reclaim fast.
Bottom line:
Bias: bearish short-term, but not a disaster fundamentally.
The earnings report was good enough; the stock reaction says the market is more focused on soft forward tone / slower growth confidence. Until ZS can get back over 150, I’d treat this as a sell-the-rip / fade-the-bounce name, not a “buy the first dip” setup.