Zscaler’s share price fell sharply in 2026 mainly because the company guided for slower growth. The biggest drop came after it reported fiscal third-quarter 2026 results on May 26, 2026. The stock fell about 18% that week and was down around 34% for the year by early July.
What happened in May 2026?
The quarter itself was solid. Revenue grew about 25% year over year to roughly $850 million, beating analyst estimates, and Zscaler raised its full-year guidance for annual recurring revenue (ARR) and revenue.
The issue was the outlook. Zscaler guided for ARR and revenue growth of 16% to 17% in fiscal 2027, down from about 24% in fiscal 2026. For a company valued as a high-growth business, that deceleration mattered more to investors than the beat.
What other factors did analysts point to?
- Slowing growth. Zscaler’s growth has come down from the 30% to 40%+ rates of earlier years as the business has scaled.
- Profitability. The company was still reporting a small GAAP net loss, which draws more scrutiny as growth slows.
- AI expectations. Zscaler has positioned its platform to secure AI applications and agents, but some analysts said the financial results did not yet show that opportunity.
A falling share price says nothing on its own about product quality, and Zscaler remains one of the largest security service edge (SSE) vendors. This page is for general information and is not investment advice.
What it means for buyers
Slower growth often leads vendors to focus on upselling and price increases within their existing customer base. If you are approaching a Zscaler renewal, it is a sensible time to benchmark cost, performance and user experience against alternatives.
Cloudbrink was named a Leader and Fast Mover in the 2025 GigaOm ZTNA Radar. Its Personal SASE runs on a single license with software-only deployment, and its FAST Edges are never more than 20ms from users, with a median under 5.2ms, to deliver consistent, LAN-like performance even on poor connections. See how the two compare in our Cloudbrink and Zscaler comparison.