Zscaler beat on every metric and the stock dropped 25%. EPS beat. Revenue beat. ARR beat. Gross margins beat. Operating margins beat. Cash flow beat. Billings beat. 23 straight quarters of EPS and revenue outperformance. So what happened? FY27 guidance. Management gave initial FY27 revenue and ARR growth guidance below expectations. The reason: Red Canary renewals drove a significant portion of FY26 net new ARR, and that tailwind does not repeat next year. Two senior sales executives departed. Capex guidance raised as FY27 data center spending was pulled forward. FCF outlook came down. AI monetization described as "more of a FY27 event." The Street's reaction: Berenberg: maintains buy, $320 target. "Trades at a significant discount to peers." Mizuho: lowers target to $185, maintains outperform. "Weaker guidance incorporates prudence." Stifel: lowers target to $175, maintains buy. "Increased scrutiny for several quarters." Piper Sandler: lowers target to $160, maintains neutral. "Peers deliver stronger growth." 80% of analysts still rate it buy. Average target $206.63. Stock trading at $184. The market is pricing in deceleration. The Street is not downgrading. One of them is wrong. $ZS $CRWD








