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Zscaler tanks 31% for worst day ever on 'prudent' guidance, sales shakeup

Cnbc · · 368 words · By Samantha Subin
Market Volatility AI Impact on Cybersecurity Financial Performance
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Zscaler's stock plummeted more than 30% on Wednesday for its worst day ever after issuing underwhelming guidance that overshadowed better-than-expected fiscal third-quarter results.

Claims checked 12
Techniques found 1
Topics 3

Coverage spectrum

Coverage gap: Low Left coverage
Left0%
Center100%
Right0%

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

What happened

Zscaler's stock plummeted more than 30% on Wednesday for its worst day ever after issuing underwhelming guidance that overshadowed better-than-expected fiscal third-quarter results.

Why it matters

The cybersecurity company guided for 16% to 17% year-over-year annual recurring revenue growth for the 2027 fiscal year, falling short of StreetAccount estimates.

Common ground

Zscaler expects $875 million to $878 million in revenue this quarter, coming up slightly short of the $878.6 million expected by FactSet.

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/2026/05/27/zscaler-zs-earnings-q3-2026.html

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 70% 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 12 claims against available evidence, cross-references, web search, and Wikipedia. Here is what the fact-checking layer found.

check_circle Corroborated 7
schedule Pending 2
info Single Source 1
cancel Disputed 1
verified Verified 1
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Claim 1: “Zscaler expects $875 million to $878 million in revenue this quarter”
CORROBORATED
Three independent CNBC cross-references and a CNBC web search result all confirm the revenue guidance of $875 million to $878 million.
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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 2: “FactSet expected $878.6 million in revenue”
CORROBORATED
Multiple web search results (CNBC and others) explicitly state that FactSet expected $878.6 million in revenue.
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wikipedia NEUTRAL — Nasdaq-100 (NDX) is a stock market index made up of equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted…
https://en.wikipedia.org/wiki/Nasdaq-100
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wikipedia NEUTRAL — The Russell 1000 Index is a U.S. stock market index that tracks the largest 1,000 stocks in the Russell 3000 Index, which represent about 93% of the total market capitalization of that index. The inde…
https://en.wikipedia.org/wiki/Russell_1000_Index
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wikipedia NEUTRAL — Transport Layer Security (TLS) is a cryptographic protocol designed to provide communications security over a computer network, such as the Internet. The protocol is widely used in applications such a…
https://en.wikipedia.org/wiki/Transport_Layer_Security
+ 3 more evidence sources
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Claim 3: “Zscaler topped fiscal third-quarter estimates, posting adjusted earnings of $1.08 per share on $850 million in revenue”
CORROBORATED
Although the 'Evidence gathered' section for claim 9 says 'No evidence found', the evidence provided for claim 3 explicitly states: 'Revenue rose 25% year over year to $850.5 million, also surpassing Wall Street expectations'. Other sources in the search results for claim 3 and 5 confirm the $850 million revenue figure.
info
Claim 4: “Zscaler is among the companies working with Anthropic on Project Glasswing”
SINGLE SOURCE
The provided evidence for this claim consists of general company descriptions of Zscaler and does not mention 'Project Glasswing' or a partnership with Anthropic.
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web search NEUTRAL — Zscaler, Inc. (/ ˈziːˌskeɪlər /) 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 — Zscaler is a leading cloud enterprise security provider helping global businesses adopt zero trust for secure digital transformation.
https://www.zscaler.com/
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web search NEUTRAL — Nov 28, 2025 · Zscaler is a cloud-native security platform that sits between your users and the internet, SaaS applications, and internal systems. Every connection is authenticated, inspected for thre…
https://technologymatch.com/blog/what-is-zscaler-how-it-work…
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Claim 5: “Over the last year, Zscaler has shed half its value”
DISPUTED
One source from February 2026 states the stock was down 18% in the last 12 months, while the claim asserts it shed half its value. There is no direct confirmation of a 50% loss over the year in the provided evidence.
travel_explore
web search NEUTRAL — May 27, 2026 · The huge drop, erasing over US$200 billion ($300 billion) from Meta's market capitalisation, spilled over to the broader technology sector and ...
https://www.facebook.com/marketwatch/posts/zscalers-stock-se…
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web search NEUTRAL — May 4, 2026 · The latest trading day saw Zscaler (ZS) settling at $142.2, representing a +1.71% change from its previous close.
https://finance.yahoo.com/markets/stocks/articles/zscaler-zs…
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web search NEUTRAL — Feb 11, 2026 · Zscaler's AI Security ARR surged 80% YoY, exceeding targets. With ZS stock at $174, analysts project 51% upside to $264 by mid-2028.
https://www.tikr.com/blog/down-18-in-last-12-months-can-zsca…
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Claim 6: “The cybersecurity company guided for 16% to 17% year-over-year annual recurring revenue growth for the 2027 fiscal year”
CORROBORATED
The claim is corroborated by a web search result from Colitco mentioning Goldman expects growth around 16% to 17% in fiscal year 2027, and the Motley Fool mentioning guidance for fiscal 2027.
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wikipedia NEUTRAL — Datagram Transport Layer Security (DTLS) is a communications protocol providing security to datagram-based applications by allowing them to communicate in a way designed to prevent eavesdropping, tamp…
https://en.wikipedia.org/wiki/Datagram_Transport_Layer_Secur…
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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 — 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
verified
Claim 7: “the memory crunch, spiking prices, and costs will hike capital expenditures as a percentage of revenues by 200 basis points during the 2027 fiscal year”
VERIFIED
Constellation Research explicitly states that for fiscal 2027, they expect capex as a percentage of revenue to increase up to 200 basis points compared to fiscal 2026 levels.
travel_explore
web search NEUTRAL — Looking ahead to fiscal 2027, based on higher prices we see in the market today, we expect capex as a percentage of revenue to increase up to 200 basis points compared to fiscal 2026 levels.”
https://www.constellationr.com/insights/news/zscaler-q3-stro…
travel_explore
web search NEUTRAL — Consequently, the analyst expects Zscaler to maintain its fiscal year 2025 billings growth guidance, considering the increasing weight of billings towards the second half of the year. Zscaler is sched…
https://in.investing.com/news/analyst-ratings/zscaler-stock-…
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web search NEUTRAL — Goldman Sachs analyst Gabriela Borges said Zscaler’s outlook reflects a maturing business cycle. She noted that AI has not yet made a big difference to the company’s revenue. Goldman expects the compa…
https://colitco.com/zscaler-stock-falls-23-weak-fy2027-outlo…
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Claim 8: “During the quarter, Zscaler said it lost two sales leaders”
CORROBORATED
CNBC and another web search result specifically mention that Zscaler reported the loss of two sales leaders during the quarter.
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web search NEUTRAL — May 27, 2026 ... Shares of Zscaler (ZS) were down more than 25% in recent trading, a day after the cybersecurity software maker forecast current-quarter sales of ...
https://finance.yahoo.com/markets/stocks/articles/zscaler-bl…
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web search NEUTRAL — May 27, 2026 ... During the quarter, Zscaler said it lost two sales leaders, and finance chief Kevin Rubin said the company is taking a "prudent approach" to ...
https://www.cnbc.com/2026/05/27/zscaler-zs-earnings-q3-2026.…
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web search NEUTRAL — May 28, 2026 ... Zscaler (ZS) stock collapsed by around 31% on May 27 following the company's fiscal third-quarter earnings report, after management framed ...
https://www.thestreet.com/investing/stocks/zscaler-ceos-2-wo…
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Claim 9: “Zscaler's stock plummeted more than 30% on Wednesday for its worst day ever”
CORROBORATED
Multiple independent sources report the stock plunge. CNBC cross-references mention a drop of 'more than 30%', and a web search result explicitly mentions a 'record-breaking plunge of over 30%' on May 27, 2026.
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wikipedia NEUTRAL — Nasdaq-100 (NDX) is a stock market index made up of equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. It is a modified capitalization-weighted…
https://en.wikipedia.org/wiki/Nasdaq-100
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wikipedia NEUTRAL — Lane Bess (born September 18, 1961) is a venture capitalist known for his work in technology. He has served as principal and founder of family fund Bess Ventures and Advisory, LLC, a strategic managem…
https://en.wikipedia.org/wiki/Lane_Bess
travel_explore
web search NEUTRAL — Zscaler is a leading cloud enterprise security provider helping global businesses adopt zero trust for secure digital transformation.
https://www.zscaler.com/
+ 2 more evidence sources
schedule
Claim 10: “Evercore ISI downgraded shares to in line from outperform and cut its price target on the stock”
PENDING
This claim was extracted as a checkable statement from the article. eFinder labels it pending based on the available evidence and source context shown below.
schedule
Claim 11: “Analysts anticipated adjusted EPS of $1.01 on about $835 million in revenue”
PENDING
This claim was extracted as a checkable statement from the article. eFinder labels it pending based on the available evidence and source context shown below.
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Claim 12: “Zscaler projected ARR of $3.74 billion to $3.75 billion in FY2026, or year-over-year growth of approximately 24%”
CORROBORATED
Both the Motley Fool earnings call transcript and a web search result confirm the FY2026 ARR projection of $3.74 billion to $3.75 billion and approximately 24% growth.
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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
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wikipedia NEUTRAL — ShinyHunters is a black-hat criminal hacker and extortion group that has been active since 2019 and is said to have been involved in a significant number of data breaches. ShinyHunters has utilized c…
https://en.wikipedia.org/wiki/ShinyHunters
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wikipedia NEUTRAL — The Russell 1000 Index is a U.S. stock market index that tracks the largest 1,000 stocks in the Russell 3000 Index, which represent about 93% of the total market capitalization of that index. The inde…
https://en.wikipedia.org/wiki/Russell_1000_Index
+ 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.