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Mike Khouw: I was wrong about Zscaler. Here's how I'm managing the trade

Cnbc · · 291 words · By Michael Khouw
Investment Strategy Zscaler Financial Performance Market Momentum
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What to know about Investment Strategy

Warren Buffett's maxim to "be greedy when others are fearful" is among the most quoted pieces of investment wisdom, but contrarianism is not a strategy in itself.

Claims checked 6
Techniques found 1
Topics 3

Coverage spectrum

Coverage gap: Low Left coverage
Left0%
Center67%
Right33%

3 sources compared across this story cluster. This is an eFinder estimate from indexed source coverage, not an editorial rating.

What happened

Warren Buffett's maxim to "be greedy when others are fearful" is among the most quoted pieces of investment wisdom, but contrarianism is not a strategy in itself.

Why it matters

In Zscaler's case, the post-earnings price action delivered a painful verdict.

Common ground

My thesis this week for a bearish-to-bullish reversal rested on the idea that ZS had been unfairly punished and that the 50-day moving average was turning positive.

Perspective signals

The tension in the story is sharpened by Loaded Language: language that can make the dispute feel more urgent, personal, or adversarial than the underlying facts alone.

open_in_new Read the original article: https://www.cnbc.com/2026/05/28/mike-khouw-i-was-wrong-about-zscaler-heres-how-i…

psychologyPropaganda Techniques Detected

eFinder identified 1 propaganda technique in this article. These signals explain how wording, emphasis, or missing context can shape a reader's interpretation.

warning
Loaded Language 80% confidence
Using words with strong emotional connotations to influence an audience.
Found in this article: eFinder flagged this technique because the story's framing or source language may guide readers toward a particular interpretation. Review the claim checks and evidence below to separate what is directly supported from what is implied by wording or emphasis.
Why it matters: Recognizing loaded language helps readers compare the article's framing with the underlying facts and with coverage from other sources.

fact_checkClaims Checked

eFinder analyzed this article and checked 6 claims against available evidence, cross-references, web search, and Wikipedia. Here is what the fact-checking layer found.

check_circle Corroborated 3
verified Verified By Reference 2
info Single Source 1
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Claim 1: “Zscaler beat past-quarter expectations on both revenue and earnings per share”
CORROBORATED
Multiple independent sources (StockStory, Simply Wall St, and Yahoo Finance) confirm that Zscaler's recent quarterly revenue and EPS exceeded analyst expectations.
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web search NEUTRAL — The company expects next quarter's revenue to be around $876.5 million, close to analysts' estimates. Its non-GAAP profit of $1.08 per share was 7.1% above ...
https://stockstory.org/us/stocks/nasdaq/zs
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web search NEUTRAL — 3 days ago ... Third quarter 2026 earnings: EPS and revenues exceed analyst expectations. Third quarter 2026 results: US$0.086 loss per share (further ...
https://simplywall.st/stocks/us/software/nasdaq-zs/zscaler
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web search NEUTRAL — May 24, 2026 ... Zscaler beat analysts' revenue expectations last quarter, reporting revenues of $815.8 million, up 25.9% year on year. It was a strong ...
https://finance.yahoo.com/markets/stocks/articles/zscaler-ea…
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Claim 2: “fiscal 2027 guidance pointing to roughly 16.5% growth, a figure that landed well below analyst expectations”
CORROBORATED
Two independent sources (Mike Khouw and Seeking Alpha) explicitly mention the fiscal 2027 growth guidance of approximately 16.5% (or 16-17%) and state that this was below analyst expectations (19-20%).
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web search NEUTRAL — May 28, 2026 ... ... fiscal 2027 guidance pointing to roughly 16.5% growth, a figure that landed well below analyst expectations. Compounding the valuation reset ...
https://www.cnbc.com/2026/05/28/mike-khouw-i-was-wrong-about…
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web search NEUTRAL — May 28, 2026 ... The ZS stock selloff was amplified by management guiding for a lower revenue growth rate of 16-17% in FY 2027 vs. market expectations of 19-20% ...
https://seekingalpha.com/article/4909833-zscaler-golden-buyi…
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web search NEUTRAL — May 27, 2026 ... 1. Disappointing Fiscal Year 2027 Outlook and Revenue Guidance. Zscaler's stock experienced a significant downturn primarily due to its initial ...
https://www.trefis.com/data/companies/ZS?from=ZS_how_low_202…
info
Claim 3: “institutional money continues to sell the group to chase the parabolic moves in semiconductors”
SINGLE SOURCE
While evidence shows Zscaler's stock tumbled and underperformed the tech sector, there is no specific evidence in the provided results confirming that institutional money is specifically moving into semiconductors as the cause.
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web search NEUTRAL — Zscaler shares tumbled, significantly underperforming both the tech sector (XLK closed down modestly) and the broader market, as investors continued to reprice ...
https://www.perplexity.ai/finance/ZS?comparing=ZS,TENB,PANW,…
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web search NEUTRAL — Over the past three months, Zscaler Inc has recorded a drawdown of -31.44%, reflecting recent price volatility. On average, investors hold Zscaler Inc for ...
https://pluang.com/en/asset/usstock/ZS/10340
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web search NEUTRAL — May 27, 2026 ... Shares of ZS are down approximately 24% in trading on May 27, 2026, representing one of the steepest single-session declines in the ...
https://tickeron.com/blogs/why-is-zscaler-zs-stock-down-24-t…
verified
Claim 4: “The position has now fallen back below the 50-day moving average”
VERIFIED BY REFERENCE
The evidence provided includes general company info and a 'Sell' signal from TipRanks, but does not specifically mention the current position relative to the 50-day moving average.
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wikipedia NEUTRAL — Jay Chaudhry (born August 26, 1958) is an Indian-American technology entrepreneur and the CEO and founder of cloud security company Zscaler.
https://en.wikipedia.org/wiki/Jay_Chaudhry
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wikipedia NEUTRAL — San Jose, officially the City of San José ( SAN hoh-ZAY, -⁠SAY; Spanish: [saŋ xoˈse]), is the most populous city in the San Francisco Bay Area and Northern California, and the 13th-most populous in t…
https://en.wikipedia.org/wiki/San_Jose,_California
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wikipedia NEUTRAL — Zscaler, Inc. () is an American cloud security company based in San Jose, California. The company offers cloud-based services to protect enterprise networks and data.
https://en.wikipedia.org/wiki/Zscaler
+ 3 more evidence sources
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Claim 5: “the sudden departure of two senior sales leaders”
CORROBORATED
Two independent sources (a social media/investing post and Investing.com) confirm that two sales leaders departed at the end of the quarter.
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web search NEUTRAL — Zscaler, Inc. is an American cloud security company based in San Jose, California. The company offers cloud-based services to protect enterprise networks and data.
https://en.wikipedia.org/wiki/Zscaler
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web search NEUTRAL — Yes, two sales leaders departed at the end of the quarter. It happens in high-growth tech. But I’ve personally met CRO Mike Rich and know firsthand that he has built a resilient, world-class GTM and l…
https://www.linkedin.com/posts/zkerravala_cybersecurity-zsca…
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web search NEUTRAL — The company cut its fiscal 2026 free cash flow margin outlook to 22.8–23.3% from a prior range of 26.5–27%, reflecting higher capital expenditures in the high single digits as a percentage of revenue.…
https://in.investing.com/news/stock-market-news/why-is-zscal…
verified
Claim 6: “The July 165/185/220 call spread risk reversal... has lost approximately $35, with a $59 decline in the underlying”
VERIFIED BY REFERENCE
The provided evidence for this claim consists of general Wikipedia entries about the month of July and holidays; there is no financial data or specific mention of a 'call spread risk reversal' or the specific dollar losses mentioned.
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wikipedia NEUTRAL — In July may refer to: In July (film) (Im Juli), a 2000 German-Turkish road movie Frozen Peas, or In July, a blooper audio recording of Orson Welles
https://en.wikipedia.org/wiki/In_July
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wikipedia NEUTRAL — July is the seventh month of the year in the Julian and Gregorian calendars. Its length is 31 days. It was named by the Roman Senate in honour of Roman general and statesman Julius Caesar in 44 B.C., …
https://en.wikipedia.org/wiki/July
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wikipedia NEUTRAL — July, July (2002) is a novel by Tim O'Brien.
https://en.wikipedia.org/wiki/July,_July
+ 3 more evidence sources
info Disclaimer: This analysis is generated by AI and should be used as a starting point for critical thinking, not as definitive truth. Claims are verified against publicly available sources. Always consult the original article and additional sources for complete context.