How Will Zscaler Stock React To Its Upcoming Earnings?

Zscaler (NASDAQ:ZS), a cloud security company that provides internet and application security solutions, is set to report its earnings on Tuesday, September 2, 2025.  Earnings are expected to come in at about $0.80 per share, per consensus estimates, while revenues are likely to grow by about 19% year-over-year to $707 million. While macroeconomic concerns have meant that IT spending remains cautious, Zscaler should continue to benefit from the prioritization of cybersecurity, particularly Zero Trust and AI-driven solutions. Growth is expected to be supported by the expansion of the company’s Zero Trust platform and adoption of new offerings such as the company’s modular, pay-as-you-go purchasing program Z-Flex.

The company has $42 billion in current market capitalization. Revenue over the last twelve months was $2.5 billion, and it was operationally loss-making, with $-123 million in operating losses and net income of $-39 million. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader.

There are two ways to do that: understand the historical odds and position yourself prior to the earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

See earnings reaction history of all stocks

Zscaler’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 10 positive and 10 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 50% of the time.
• The percentage remains the same at 50% if we consider data for the last 3 years instead of 5.
• Median of the 10 positive returns = 9.1%, and median of the 10 negative returns = -8.8%

Additional data for observed 5-Day (5D) and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

1D, 5D, and 21D Post Earnings Return

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

Correlation Between 1D, 5D and 21D Historical Returns

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have an influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Zscaler stock compared with the stock performance of peers that reported earnings just before Zscaler. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

Correlation With Peer Earnings

Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Zscaler, consider the High Quality portfolio, which has outperformed the S&P and clocked >91% returns since inception.