Zscaler, Inc. stock sinks 7.8% as weak 2027 guidance overshadows earnings beat

Zscaler, Inc. stock is under clear pressure after its fiscal fourth-quarter results, with the daily chart reflecting market discomfort over slowing growth. Shares closed Tuesday at $161.94, down from $165.62 at the open, after touching $159.24. The post-earnings reaction has become a developing technical story, not a one-day event.

ZS — daily chart with candlesticks, EMA20/EMA50 and volume.

Key takeaways

• Zscaler beat Q4 estimates with $898.19 million in revenue, but fiscal 2027 guidance pointed to slower ARR growth
• The stock dropped 7.8% post-earnings, weighed further by a Seeking Alpha Sell rating citing concerns over $640M in weak net new ARR
• The daily chart shows price below the 20, 50, and 200 EMAs, with RSI14 at 43.62 and a MACD histogram of -2.88
• Daily support stands at 158.91 and resistance at 165.29, with ATR14 elevated at 9.75
• The 1H chart confirms the bearish tone while flashing early oversold conditions near an RSI14 of 31.38

The fundamental backdrop explains much of this pressure. Zscaler beat estimates for the quarter, posting revenue of $898.19 million and full-year revenue of $3.35 billion. That represents 24.9% year-over-year growth. However, the company remains loss-making on a net income basis. Its fiscal 2027 guidance pointed to slower annual recurring revenue growth. That guidance, paired with an AI-focused restructuring announcement, triggered a 7.8% drop in Zscaler, Inc. stock. Seeking Alpha went further, flagging a $640 million concern tied to weak net new ARR and assigning a Sell rating. Meanwhile, comparisons to Palo Alto Networks have not helped sentiment. Palo Alto showed faster growth and stronger free cash flow in the same earnings cycle.

Daily Chart: Zscaler Stock Turns Bearish Despite Neutral Label

Zscaler, Inc. stock sits below all major daily moving averages, confirming a structural shift to the downside. This is true even though the automated regime reading still labels conditions as neutral. Price closed at $161.94. It sits beneath the 20-period EMA at 173.69, the 50-period EMA at 164.81, and the 200-period EMA at 180.89. This alignment is a textbook sign of a market that has lost its uptrend structure.

Momentum indicators reinforce the bearish outlook. RSI14 at 43.62 is not yet oversold but sits comfortably below the midline, reflecting momentum that has clearly rolled over. The MACD line at 2.73 versus a signal line at 5.61 produces a histogram of -2.88. That wide negative gap confirms accelerating downside momentum rather than stabilization. Notably, price has also pushed below the lower Bollinger Band at 164.34. The midline rests far above at 178.72 and the upper band at 193.10. Trading outside the lower band after an earnings gap typically signals a stretched, high-conviction move rather than routine noise.

Volatility has expanded accordingly. The ATR14 reading of 9.75 is elevated, consistent with the size of the earnings-driven gap and the follow-through selling. In terms of levels, the daily pivot sits at 162.27. Resistance stands at 165.29 and support at 158.91. Price is hovering right around the pivot, making this an important decision zone for the next leg.

1H Timeframe: Confirmation, With an Early Oversold Signal

The 1-hour chart largely reinforces the daily bearish tone while hinting that near-term selling may be reaching its limit. Zscaler, Inc. stock remains below the 20 EMA at 167.70, the 50 EMA at 172.97, and the 200 EMA at 171.34. This clean bearish stack leaves little ambiguity about the short-term trend.

Meanwhile, RSI14 has dropped to 31.38, edging close to oversold territory. This suggests the selling pressure has been persistent enough to stretch momentum to its short-term limit. The MACD line at -4.19 versus a signal line at -3.75 gives a histogram of -0.45. While still negative, this histogram is notably narrower than the scale of daily bearish momentum. Intraday selling pressure may be decelerating even as the broader daily trend stays weak. Bollinger Bands on this timeframe show a midline at 169.30, an upper band at 182.34, and a lower band at 156.27. Price still has room before testing the extreme edge of the range. The 1H pivot at 162.22 mirrors the daily pivot closely, reinforcing 162 as a key intraday battleground.

15-Minute Execution Context

The 15-minute chart is explicitly marked bearish, and the structure agrees with that label. Price trades below the 20 EMA at 162.96, the 50 EMA at 165.65, and the 200 EMA at 173.27. RSI14 at 40.03 is soft but not extreme.

Interestingly, the MACD histogram here has flipped slightly positive at 0.24. However, the MACD line at -0.77 remains below the signal line at -1.02. This small divergence suggests a short-term pause or minor bounce attempt within the larger downtrend. It is useful only for timing entries or exits rather than for defining direction. The 15m pivot at 162 frames the tight consolidation range, with resistance at 162.51 and support at 161.44.

Bullish Scenario for Zscaler Stock

A bullish turnaround would depend on stabilization, not an immediate full reversal. Zscaler, Inc. stock would need to reclaim the daily pivot at 162.27 and push through 1H resistance near 162.94. That would be an early sign of buyers stepping back in.

If RSI14 on the 1-hour chart turns higher from the current 31.38 reading without making new lows, a relief rally scenario gains support. A move back toward the daily EMA50 at 164.81, and then the R1 level at 165.29, would be the first real test. It would reveal whether the move is a bounce or a trend change. Beyond that, reclaiming the daily Bollinger midline at 178.72 would be needed to argue the broader downtrend is actually reversing.

Bearish Scenario for Zscaler Stock

The bearish case is currently better supported by the weight of evidence across all three timeframes. A break below daily support at 158.91 would open the door to a deeper move. With ATR14 at 9.75, large daily ranges are already in play.

At the same time, continued negative MACD histogram readings on both the daily and 1H charts would keep sellers in control. The fundamental overhang from slowing ARR growth and the Seeking Alpha Sell rating adds to the pressure. The bullish scenario would be invalidated if price fails to hold above 1H support at 161.22. Instead, grinding lower through the 15m pivot at 162 would confirm that the bounce attempt lacks real buying conviction.

Closing Thoughts

Overall, Zscaler, Inc. stock is caught between a fundamentally disappointing guidance cycle and a technical structure that has not yet found a floor. The daily trend is bearish in substance if not in label. The 1-hour chart confirms that weakness while flashing early oversold conditions. The 15-minute chart shows only tentative signs of stabilization.

Therefore, traders should treat the 158.91 to 165.29 range as the key battleground in the days ahead. Given elevated ATR readings and the unresolved debate around ARR growth, volatility is likely to remain high. Positioning should account for sharp moves in either direction. The market is still digesting both the technical picture and the fiscal 2027 outlook.

FAQ

Why did Zscaler stock drop after earnings?

Zscaler, Inc. stock fell 7.8% after the company issued fiscal 2027 guidance pointing to slower annual recurring revenue growth. Although Q4 revenue of $898.19 million beat estimates, the weaker forward outlook, combined with an AI-focused restructuring announcement, triggered selling pressure.

What are the key technical levels for Zscaler stock right now?

Daily support sits at 158.91 and resistance at 165.29, with the daily pivot at 162.27. On the 1H chart, support is at 161.22 and resistance at 162.94. The 158.91–165.29 range is the critical battleground for the near term.

Is the selloff in Zscaler stock overdone?

The 1H RSI14 at 31.38 is approaching oversold territory, suggesting selling pressure may be near a short-term limit. However, the daily MACD histogram at -2.88 shows accelerating downside momentum. The broader trend remains bearish despite early intraday stabilization signals.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, an investment recommendation, or a solicitation to buy or sell any financial instrument or cryptocurrency. The analysis provided is not indicative of future results. Investing in crypto assets and financial markets carries a high risk of capital loss. Always do your own research (DYOR) and consult a qualified financial advisor before making any decision.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.