Zscaler: Cheaper Than Other Cybersecurity Names For A Reason

Zscaler faces execution challenges despite industry tailwinds, with FY2027 guidance signaling decelerating revenue and ARR growth. Q4 showed solid margins and net new ARR acceleration, but overall top-line growth remains uninspiring amid strong cybersecurity demand. Strategic partnerships with AWS and CrowdStrike offer potential long-term catalysts, yet immediate business momentum lags sector leaders. Zscaler's forward P/E is near multiyear lows, but risk/reward remains neutral given a premium forward PEG and underwhelming growth outlook.

Unlike some other big cybersecurity names, Zscaler, Inc. (ZS) stock has had a rather lackluster CY2026 so far. All the way back in January, I upgraded to a hold rating.