Zscaler (ZS) Stock Before the Bell on December 1, 2025: Can a Brutal Post‑Earnings Sell‑Off Turn Into a Buying Opportunity?

Zscaler Inc. (NASDAQ: ZS) heads into the first trading day of December under heavy scrutiny. After delivering another earnings beat but a controversial guidance “raise,” the cloud‑security leader has seen its stock punished throughout late November, with fresh analyst target cuts, institutional selling and bearish quant signals all landing between November 28–30.

As of the close on Friday, November 28, Zscaler shares finished at $251.50, giving the company a market capitalization of roughly $40 billion and leaving the stock down about 13% from its pre‑earnings close on November 25. Over the last 12 months, however, ZS is still up more than 30%, and it remains well above its 52‑week low of $164.78 and below its $336.99 high. ^[1]

With U.S. markets set to reopen on Monday, December 1, 2025, here’s how Zscaler looks based on the latest news, forecasts and analysis published November 28–30, 2025.

1. Snapshot: Where Zscaler Stock Stands Before the December 1 Open

Price & trading range (as of November 28, 2025):

Last close: $251.50
Day’s range (Fri, Nov 28): roughly $249.7 – $256.3 ^[2]
52‑week range: $164.78 – $336.99 ^[3]
Approximate market cap: $40 billion ^[4]

Fundamentally, Zscaler is still growing like a classic high‑growth SaaS name, but it trades on a rich multiple and is only marginally profitable on a GAAP basis:

Revenue growth (latest quarter): +25–26% year‑over‑year to about $788 million
Non‑GAAP EPS:$0.96, beating consensus around $0.85–0.86
GAAP net margin: roughly –1.5% (slight loss) ^[5]
Free cash flow: about $413 million in the latest quarter, a ~52% FCF margin – unusually high even for top‑tier software. ^[6]

StockStory’s November 29 update pegs Zscaler’s forward price‑to‑sales ratio at roughly 11.6x, and still labels the business as a “high‑quality, investable” name, arguing that the valuation is fair relative to its growth and cash generation. ^[7]

At the same time, valuation metrics tied to earnings look stretched: FinanceCharts estimates a PEG ratio above 200 (driven by tiny GAAP earnings and a negative short‑term EPS growth rate), placing ZS at the extreme high end versus large cybersecurity peers. ^[8]

2. Earnings Beat, Guidance Controversy and the November Sell‑Off

The current drama around Zscaler starts with fiscal Q1 2026 results (quarter ended October 31, 2025), released on November 25.

Earnings: very strong headline numbers

According to Reuters and multiple research wrap‑ups: ^[9]

Revenue: $788.1M, up 26% YoY, beating estimates around $773–774M.
Adjusted EPS: $0.96 vs. consensus ~$0.86.
ARR (annual recurring revenue): ~$3.2B, up about 26% YoY.
Billings: around $597M, up roughly 15–16% YoY, but weaker than many bulls had hoped. ^[10]
Free cash flow: about $413M, for a 52% FCF margin. ^[11]

Ts2.tech’s November 30 deep‑dive notes that Zscaler is now operating at what management calls a “Rule of 78”—combining roughly 26% revenue growth with a 52% free cash flow margin, far above the classic “Rule of 40” standard for mature SaaS. TS2 Tech

Guidance: raised, but “not enough” for a momentum stock

Zscaler did raise guidance, but only modestly: ^[12]

FY 2026 revenue: now $3.28–$3.30B (vs. prior $3.27–$3.28B)
FY 2026 non‑GAAP EPS:$3.78–$3.82 (vs. prior $3.64–$3.68)
FY 2026 ARR:$3.698–$3.718B, implying low‑to‑mid‑20s ARR growth
Q2 FY 2026 revenue:$797–$799M
Q2 non‑GAAP EPS:$0.89–$0.90

RBC analysts highlighted that the increase in revenue outlook was smaller than the first‑quarter revenue beat, reading the guidance as conservative rather than truly upgraded. ^[13]

Needham went further, cutting its price target from $350 to $310 while keeping a Buy rating. A widely cited note flagged “messaging” issues around ARR: Zscaler raised full‑year ARR guidance by only about $21M while lifting its AI security ARR outlook by roughly $100M, confusing some investors about how the moving parts fit together. TS2 Tech+1

Market reaction: a sharp reset

The stock’s short‑term price reaction has been harsh:

On November 26, the day after earnings, ZS fell roughly 12–13% in regular trading, erasing most of its year‑to‑date premium multiple expansion. TS2 Tech+1
AInvest’s November 29 analysis calculates an 11.7% intraday plunge closely following Needham’s target cut, and notes that shares were down about 14% over the month despite strong fundamental metrics. ^[14]
Ts2.tech estimates Zscaler dropped around 24% in November, making it one of the weaker large‑cap growth names for the month. TS2 Tech

The paradox is clear: great quarter, cautious interpretation. Investors are wrestling with whether management is simply sandbagging or signaling that sustaining mid‑20s growth will be harder from here.

3. Fresh Analyst Calls (Nov 28–30): Targets Cut, But Upside Still Large

Despite the sell‑off, Wall Street has not turned outright bearish on Zscaler. Recent research between November 28–30 paints a picture of expectations being reset, not abandoned.

Berenberg trims its target, but remains bullish

On November 29, MarketBeat reported that Berenberg Bank: ^[15]

Cut its price target from $400 to $390
Maintained a “Buy” rating
Still sees about 54% upside from current levels

The same report cites Zscaler’s Q1 beat (EPS $0.96 vs $0.85; revenue $788.11M, +25.5% YoY) and notes that, even with a negative GAAP margin, analysts broadly view the business as a high‑quality growth compounder.

Consensus targets: still 25–35% above Friday’s close

Several aggregators updated their numbers in the last few days:

TipRanks (Nov 29):
- 38 analysts in the last three months
- Consensus rating: Strong Buy
- Average 12‑month price target:$334.30
- Range $264 – $390
- Implied upside: about 33% from a last price near $252. ^[16]
MarketBeat (via Nov 30 institutional‑ownership update):
- Overall consensus: “Moderate Buy”
- Roughly 34 Buy, 8 Hold, 1 Sell rating
- Average price target: about $316.56 (≈26% upside). ^[17]
QuiverQuant (Nov 27 discussion of the post‑earnings drop):
- Notes that at least 20 firms have Buy‑equivalent ratings
- Lists recent targets from major brokers such as J.P. Morgan ($354), Baird ($360), UBS ($340), Scotiabank ($320), Stifel ($320), Citizens ($355) and Needham ($310) issued around November 26. ^[18]

StockStory’s November 29 research report pegs the Street’s average target near $328, implying about 30% upside from a price around $251, and explicitly concludes: “We like the stock at this price.” ^[19]

So while analysts have toned down expectations — and trimmed some sky‑high targets — the Street still sees meaningful upside from Friday’s close.

4. Institutional Flows and Insider Activity: A Subtle Headwind

Fresh data published November 30 shines a light on who has been buying and selling ZS.

Korea Investment CORP trims its stake

A MarketBeat piece on November 30 highlights that Korea Investment CORP: ^[20]

Reduced its Zscaler position by 37.4% in Q2, selling 47,457 shares
Now holds 79,344 shares, worth about $24.9M, or roughly 0.05% of the company

The same article notes that institutional investors hold about 46.5% of Zscaler’s float, while insiders own about 18.1% of the stock. ^[21]

Heavy insider selling in recent months

QuiverQuant’s November 27 insider‑trading overview shows 52 insider transactions in the last six months, all of them sales, including: ^[22]

120,000 shares sold by executive Ajay Mangal
Nearly 68,000 shares sold by board member Charles Giancarlo
Multiple sales from senior leaders including the CTO, CRO and Chief Legal Officer

MarketBeat estimates insiders have sold about 43,000 shares worth $12.4M in the last 90 days alone. ^[23]

Insider selling isn’t automatically bearish — stock‑based compensation, diversification and tax planning are all common motives — but the absence of any recent open‑market insider buying has been flagged repeatedly in weekend commentary as a sentiment overhang.

Hedge funds: mixed signals

QuiverQuant also tracks institutional moves: ^[24]

Some large holders, like PRICE T. ROWE Associates and Vanguard, added significantly to their positions in Q3 2025
Others, including UBS Group AG and Citadel, sharply reduced exposure

Taken together, the latest flow data suggest positioning is being actively reshuffled rather than uniformly capitulating or piling in.

5. Technical Picture and Algorithmic Forecasts: Short‑Term Bearish Signals

From a pure chart and quant‑indicator standpoint, the late‑November message on ZS is decidedly bearish.

Moving averages: almost everything says “sell”

CoinCodex’s November 30 technical dashboard shows: ^[25]

All commonly followed daily simple moving averages (3, 5, 10, 21, 50, 100, 200‑day) are flashing SELL on ZS
All corresponding exponential moving averages also register SELL
Sentiment gauge: 85% bearish, 15% bullish

With Friday’s close around $251, ZS is trading well below its 50‑day and 100‑day moving averages in the low‑$300s, and also under its ~200‑day average near the mid‑$260s, confirming the recent breakdown from its prior uptrend. ^[26]

Quant price predictions: one model sees steep downside

The same CoinCodex model offers aggressive algorithmic forecasts (purely technical, not fundamental): ^[27]

“Tomorrow” forecast: about $250.92, essentially flat vs. the current price
Next 7 days: projected drop of roughly –9% to around $227–228
1‑year target: about $97, implying ~61% downside
Long‑term (2030) projections stay well below today’s price

Because these are generated by a rules‑based algorithm trained on historical price patterns, not on business fundamentals, they should be interpreted with caution. Even CoinCodex’s own disclaimer stresses that this is not investment advice and that real‑world outcomes may differ dramatically.

Still, taken at face value, the technical backdrop implies that momentum and trend‑following strategies are likely to lean against ZS into early December unless a new positive catalyst arrives.

6. Growth Engines and Fundamentals Heading Into 2026

Away from the chart, the underlying business case for Zscaler remains strong — and that’s what keeps many analysts firmly in the bull camp.

A leading zero‑trust and SASE platform

StockStory’s November 29 research report highlights Zscaler as a pioneer of zero‑trust network security, running a massive cloud security fabric that: ^[28]

Processes over 500 billion transactions per day
Operates via more than 160 data centers across 185 countries
Primarily serves large enterprises, with roughly 35% of the Forbes Global 2000 as customers

The platform spans secure internet access (ZIA), private app access (ZPA), workload security and IoT/OT protection, giving ZS a broad opportunity set as companies phase out legacy VPNs and on‑prem firewalls.

AI security, data security and Z‑Flex: the new growth pillars

Ts2.tech and AInvest both emphasize how Zscaler is leaning into AI‑driven security and broader platform adoption: TS2 Tech+2AInvest+2

AI Security ARR already exceeded the prior $400M FY 2026 goal three quarters early, and management now expects it to surpass $500M by year‑end.
Data Security Everywhere ARR has accelerated to about $450M, reflecting rising concern over data exfiltration in hybrid and multi‑cloud deployments.
Zero Trust Everywhere is now deployed at more than 450 enterprises, hitting a multi‑year target ahead of schedule.
The Z‑Flex commit‑to‑spend program generated over $175M in total contract value in Q1, up about 70% quarter‑over‑quarter, and is becoming a larger share of bookings.

On top of this, the company is doubling down on AI‑specific security. On November 3, Zscaler announced the acquisition of SPLX, an AI‑security specialist offering AI asset discovery, red‑teaming and governance. The deal extends the Zscaler Zero Trust Exchange to better secure AI models, prompts and data across the entire AI lifecycle. ^[29]

Zscaler is also an early partner in Microsoft’s Entra Agent ID ecosystem, integrating identity controls for AI agents directly into its zero‑trust fabric — another sign that it sits at the intersection of AI and security spend, two of the market’s biggest secular themes. ^[30]

Profitability: cash‑rich but still GAAP‑negative

Zscaler’s free‑cash‑flow engine is undeniably powerful. StockStory notes that FCF margin averaged about 30% over the last year and spiked to over 52% in the most recent quarter. ^[31]

At the same time, GAAP numbers remain in the red:

GAAP net margin: around –1.5%
GAAP operating margin: roughly –4–5% over the last year ^[32]

This gap reflects heavy stock‑based compensation and aggressive investment in R&D, AI and sales capacity. Bulls argue that with such strong cash generation and a net cash position over $1 billion, Zscaler can afford to prioritize growth. Bears counter that high‑multiple stocks with persistent GAAP losses can de‑rate quickly if growth slows even modestly.

7. Bulls vs Bears: How the Market Is Framing ZS Into December

Bull case heading into Monday’s open

From analyst notes and recent research (Nov 28–30), the bullish thesis broadly looks like this: ^[33]

Category leadership: ZS is a top‑tier pure‑play in SASE and zero‑trust security, with a large, loyal enterprise customer base.
Durable growth: Revenue and ARR are still growing in the mid‑20s, with strong dollar‑based net retention (~115%) and a deep RPO backlog nearing $6B. ^[34]
Massive cash generation: 50%+ free‑cash‑flow margins give management ample flexibility to invest, acquire and weather macro volatility.
AI & data security tailwinds: Early success in AI security and data protection, plus strategic deals like SPLX and the Microsoft Entra partnership, support a long runway.
Upside to guidance: If ARR and billings recover toward prior trends, today’s conservative guidance could set up classic “beat and raise” quarters in 2026.
Valuation reset: After a roughly 20–25% November drawdown, several fundamental shops (including StockStory) now describe the stock as reasonably valued for its quality, with consensus targets implying 25–35% upside from current levels.

For long‑term growth‑oriented investors, this camp views the recent sell‑off as a painful but potentially attractive reset.

Bear case: rich valuation, billings miss and technical breakdown

On the other side, bearish and cautious commentary over November 28–30 focuses on: ^[35]

Billings disappointment: The billings growth rate (mid‑teens) lagged revenue growth, fueling concerns that the pipeline is decelerating.
Guidance optics: Modest raises to revenue and ARR guidance, despite a large Q1 beat, are being interpreted as a signal to lower the bar, not a sign of accelerating demand.
Valuation risk: Even after the drop, ZS trades on double‑digit sales multiples and extreme PEG metrics; any sustained slowdown could trigger further de‑rating.
Insider and institutional selling: Persistent insider sales and some large hedge funds cutting stakes reinforce the idea that “smart money” is locking in gains. ^[36]
Technical damage: The stock has broken below key moving averages, with quant models flashing overwhelmingly negative signals and at least one algorithmic forecast projecting sharp downside over the next year. ^[37]

Short‑term traders and risk‑averse investors may see little reason to step in ahead of confirmed stabilization in billings and ARR growth.

8. What to Watch at the December 1, 2025 Open

When ZS resumes trading on Monday, December 1, investors will be watching a few key things:

Price action around the mid‑$200s
- Friday’s close near $251–252 now serves as a short‑term reference point. Sustained trading below this area could invite another leg lower toward the low‑$200s; a quick reclaim of the mid‑$260s would signal dip‑buyers are stepping in. ^[38]
Volume vs. recent sessions
- Heavy volume on further downside would confirm institutional selling; lighter, choppy trade might suggest the violent part of the reset is already behind the stock.
New analyst commentary or rating changes
- With Berenberg’s cut and Korea Investment’s stake reduction already digested over the weekend, any fresh target revisions or rating changes early this week could set the tone. ^[39]
Sector sentiment
- Peers like CrowdStrike, Palo Alto Networks, Cloudflare and Fortinet often move together; another strong day for cybersecurity could help ZS stabilize even without company‑specific news. ^[40]
Macro backdrop & rates
- As a high‑multiple growth name, Zscaler remains sensitive to moves in yields and broader risk appetite. Any surprise on the macro or Fed front can quickly overshadow company‑specific fundamentals.

9. Bottom Line: ZS Before the Bell

Heading into the December 1, 2025 open, Zscaler sits at the intersection of stellar fundamentals and fragile sentiment:

The business is executing well — mid‑20s revenue growth, accelerating AI and data‑security ARR, and elite free‑cash‑flow margins. ^[41]
The stock, however, has just endured a sharp November de‑rating, driven by guidance optics, a perceived billings slowdown, rich valuation and heavy selling pressure from traders, insiders and some institutions. ^[42]

For longer‑term investors who buy the Zero Trust and AI‑security story, the past week’s volatility may look like an opportunity to accumulate a high‑quality name at a discount to recent highs — especially with the Street’s average target still 25–35% above Friday’s close. For shorter‑term traders and more cautious investors, the combination of technical weakness, bearish quant forecasts and unresolved questions around billings and ARR may argue for patience until the chart or guidance clearly improves.

Either way, ZS will be a closely watched ticker when the market opens on Monday. The next few quarters — and the stock’s behavior in early December — will help determine whether November’s plunge proves to be a healthy reset in a long‑running growth story or the start of a more prolonged re‑rating.

This article is for informational and educational purposes only and does not constitute financial, investment or trading advice. Always do your own research and consider consulting a licensed financial professional before making investment decisions.

Zscaler $(ZS) Just Dropped Earnings – BUY NOW or HUGE MISTAKE