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ZS · Analysis updated Nov 10, 2026, 6:00 PM ET
Why is Zscaler, Inc. Common Stock (ZS) stock moving?
ZS has fallen about 25% from its Oct 26 close of $260.45 to $194.92 on Nov 10, and the Nov 10 close is the lowest close in the 30-day window. The decline came in steps: a gap-down open on Oct 29 (from $255.80 to $235.51) on the same day Fortinet fell 26% on slowing growth and lower service revenue guidance, then a 5.9% drop on Nov 2 and a 9.2% drop on Nov 5 on 2.95M shares, the heaviest volume since Oct 23. Volume has been lower on the most recent sessions (2.25M on Nov 10), and the stock closed slightly above its VWAP of $194.54 after touching an intraday low of $188.88. The Commvault partnership announced Nov 10 is a concrete AI-security tie-up, but it has no disclosed financial terms and the market data shows no clear rebound on that day. The Mesh Security advisory role is immaterial. The company's Q1 FY2027 results are due after the close on Dec 2, 2026, and an Oct 6 filing says it reaffirmed Q1 guidance, so that report is the main event ahead. The filings and news contain no revised guidance, so the bearish price trend is not yet tested against new financial numbers.
News behind the analysis
- Commvault and Zscaler Announce Strategic Partnership for AI SecurityCommvault and Zscaler entered a strategic partnership to enhance enterprise AI security, covering governance, data protection, and recovery from harmful agentic activity. The announcement gives no financial terms.
- Commvault Collaborates With Zscaler Over AI Adoption For ClientsBenzinga reports the Commvault and Zscaler collaboration is aimed at helping enterprise clients adopt AI with governance and resilience.
- Zscaler CISO in Residence Yiannis Vassiliades Joins Mesh Security Advisory BoardA Zscaler executive was appointed to the strategic advisory board of Mesh Security, a cybersecurity intelligence platform. This is a personnel item with no direct financial impact.
- Zscaler to Host First Quarter Fiscal Year 2027 Earnings Conference CallZscaler will release first-quarter fiscal 2027 results after market close on December 2, 2026. This is the next scheduled company catalyst.
- Why Is Fortinet Stock Falling Thursday?Fortinet fell 26% despite beating Q3 earnings, as slowing growth and lower service revenue guidance drove an investor sell-off. ZS gapped down on the same day.
About Zscaler, Inc. Common Stock
Zscaler is a San Jose-based cybersecurity company that sells cloud security software. Companies use it to connect their employees safely to the internet and to internal apps. Its main idea is "zero trust": every connection runs through Zscaler's own global cloud instead of old-style firewalls and VPNs, so apps stay hidden from attackers. Founder Jay Chaudhry is still CEO.
How it makes money
Nearly all of its revenue comes from subscriptions. Customers mostly pay per user for its cloud services: Zscaler Internet Access, Zscaler Private Access, data protection, and newer security-operations tools added with its purchase of Red Canary. A growing share of new sales is priced by usage rather than by user. In fiscal 2026 (ended July 2026), revenue was about $3.35 billion, up roughly 25%, and annual recurring revenue was about $3.77 billion. Gross margins on a non-GAAP basis (excluding items like stock pay) are around 80%. The company shows a profit on a non-GAAP basis but a small loss under standard accounting (GAAP), largely because of stock-based pay.
What usually moves ZS
- Growth in annual recurring revenue (ARR) and guidance in quarterly results
- Business spending on cybersecurity and IT
- Competition in zero trust and SASE, a market that combines networking and security in the cloud
- Demand for tools to secure AI use and AI agents
- Software stock valuations and interest rates