Cybersecurity firm Zscaler's shares fall on dour annual forecasts
Sept 4 (Reuters) -Zscaler ZS.O shares tumbled15.2% in premarket trading on Wednesday following the cybersecurity firm's downbeat annual forecasts.
The forecast comes after peersPalo Alto Networks PANW.O andSentinelOne S.N boosted expectations with strong annual revenue forecasts as CrowdStrike's CRWD.O customers reevaluated their options in the aftermath of aglobal IT outage.
Zscaler was on track to shed more than $4 billion from its market valuation of $29.2 billion, if premarket losseshold.
The company expects full-year revenue in the range of $2.60 billion to $2.62 billion, while analysts' estimated $2.63 billion, according to LSEG data.
"Contracted billings, a significant and growing portion of total billings, are projected to grow 7% in 1H2025, reflecting the impact of past macro challenges that have led to a historically lower growth rate in the first half," Rosenblatt Securities analyst Catharine Trebnick said in a note.
At least five brokerages cut their price targets on thestock with the median at $220, down from $224 in August.
Zscaleron Tuesday also forecast full-year adjusted net income of $2.81 to $2.87 per share, compared with estimates of $3.33.
Still, analysts at Bernstein said that demand could pick up for Zscaler, pointing to increasing "sales effectiveness".
Reporting by Harshita Mary Varghese in Bengaluru; Editing by Shailesh Kuber
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