Zscaler's Quarter Already Beat: What September Third Really Determines Is Whether Sixteen Percent Was the Floor

Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.

Part 2.1: Price Behavior Around Earnings

Zscaler typically reports earnings after market close, meaning Day 0 reflects pre-announcement anticipation while Day +1 captures the market's first full reaction to results.

Historical price behavior around Zscaler earnings reveals extreme volatility, with an average absolute Day +1 move of 11.78%—nearly five times the typical Day 0 move of 2.45%. The most dramatic recent example came after the May 2026 report, when the stock gained just 1.22% on Day 0 but then plunged 31.52% the following session despite beating estimates, highlighting how guidance and management commentary can overwhelm the headline numbers.

The pattern shows Day +1 moves have been predominantly negative over the past year, with five of the last eight earnings releases resulting in declines the day after reporting. The February 2026 and November 2025 reports both produced double-digit Day +1 declines of 12.17% and 13.03% respectively, while September 2024 saw an 18.67% drop. This consistent post-earnings selling pressure suggests investors have been disappointed by forward guidance or management commentary even when quarterly results meet or exceed expectations, creating a challenging setup for bulls heading into this release.

Part 2.2: Options Market Expected Move

The options market is pricing an expected move of 10.97% for this earnings release, which sits slightly below the stock's average historical Day +1 move of 11.78% but well above the average Day 0 move of 2.45%. This suggests options traders are anticipating significant volatility but perhaps slightly less dramatic than the stock's recent post-earnings history, particularly the outlier 31% decline following last quarter's report.

Part 3: What Analysts Are Saying

Analyst sentiment on Zscaler remains decidedly bullish, with the consensus rating at 4.56 out of 5.00 and an average price target of $197.77—implying 14.5% upside from the current price of $172.73. The analyst community is heavily skewed toward optimism, with 34 Strong Buy ratings and 2 Moderate Buy ratings against just 9 Hold ratings and zero sell recommendations among the 45 analysts covering the stock.

The sentiment trend has remained unchanged over the past month, suggesting analysts are maintaining their conviction despite recent stock volatility. The price target range spans from a low of $145.00 to a high of $250.00, reflecting divergent views on the company's near-term trajectory but with the consensus firmly in bullish territory.

The stability in analyst ratings is notable given the stock's dramatic post-earnings declines over the past year. This suggests the analyst community views recent weakness as a buying opportunity rather than a fundamental deterioration, maintaining faith in Zscaler's long-term positioning in the zero-trust security market even as near-term execution remains uneven.

Part 4: Technical Picture

The Barchart Technical Opinion currently shows a Buy signal at 40%, representing a significant strengthening from 8% Buy both one week and one month ago. This sharp improvement in technical momentum heading into earnings suggests the stock has built positive near-term momentum despite trading below several key moving averages.

Timeframe Analysis:

• Short-term (50% Buy): Moderate buy signal indicates improving near-term momentum as the stock recovers from recent weakness
• Medium-term (50% Buy): Matching the short-term reading suggests consistent positive momentum across intermediate timeframes
• Long-term (Hold): Neutral reading reflects the stock's struggle to establish a clear longer-term directional bias

Trend Characteristics: The trend is characterized as Weak and Weakening, suggesting the recent technical improvement lacks strong conviction and remains vulnerable to reversal, particularly important given the stock's history of sharp post-earnings declines.

The stock is currently positioned below its 5-day ($182.20), 10-day ($178.25), 20-day ($178.64), and 200-day ($173.69) moving averages, but above its 50-day ($159.03) and 100-day ($149.99) averages.

This mixed technical picture presents a cautionary setup heading into earnings. While the stock has recovered from deeper lows and sits above its 50-day and 100-day moving averages, the failure to reclaim shorter-term averages and the proximity to the 200-day moving average at $173.69 suggests limited technical cushion. The "Weak" and "Weakening" trend characterization is particularly concerning given Zscaler's history of violent post-earnings moves—the stock has little technical support if guidance disappoints. Bulls would want to see the stock reclaim the $178-$182 zone to establish a more constructive technical foundation, while bears will note that any disappointment could quickly push the stock back toward the $150 level where the 100-day moving average currently resides.