ZS Stock Falls -19% With A 5-day Losing Spree On Analyst Price Target Cuts
Zscaler (ZS) – a cloud security platform for secure internet and workload access – hit a 5-day losing streak, with cumulative losses over this period amounting to -19%. The company’s market cap has crashed by about $5.5 Bil over the last 5 days and currently stands at $23 Bil.
The stock has YTD (year-to-date) return of 36.3% compared to -0.1% for S&P 500. This calls for a re-evaluation of the stock’s valuation to find out whether this is an opportunity or a trap.
What Triggered The Slide?
[1] Multiple Analyst Price Target Reductions
- JPMorgan Target Cut to $267
- Stephens & Co Target Cut to $225
- Impact: Intensified Selling Pressure, New 52-Week Low
[2] Sector-Wide Sell-Off On AI Disruption Fears
- Anthropic’s Autonomous AI Security Agent Announcement
- Over $15 Billion In Market Value Erased From The Sector
- Impact: Significant Single-Day Decline, Broad Market Re-evaluation Of Cybersecurity Sector
Opportunity or Trap?
Below is our take on valuation.
There is not much to fear in ZS stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive (For details, see Buy or Sell ZS).
But here is the real interesting point.
You are reading about this -19% move after it happened. The market has already priced in the news. To avoid the next loser before the headlines, you need predictive signals, not notifications. Our High Quality Portfolio has a risk model designed to reduce exposure to losers.
Returns vs S&P 500
The following table summarizes the return for ZS stock vs. the S&P 500 index over different periods, including the current streak:
| Return Period | ZS | S&P 500 |
|---|---|---|
| 1D | -10.3% | -1.0% |
| 5D (Current Streak) | -19.4% | 0.0% |
| 1M (21D) | -31.2% | -1.1% |
| 3M (63D) | -50.9% | 2.9% |
| YTD 2026 | -36.3% | -0.1% |
| 2025 | 24.7% | 16.4% |
| 2024 | -18.6% | 23.3% |
| 2023 | 98.0% | 24.2% |
Take a look at what history tells you about whether past dips like this have been buying opportunities or traps: ZS Dip Buyer Analysis.
Gains and Losses Streaks: S&P 500 Constituents
There are currently 48 S&P constituents with 3 days or more of consecutive gains and 66 constituents with 3 days or more of consecutive losses.
| Consecutive Days | # of Gainers | # of Losers |
|---|---|---|
| 3D | 30 | 47 |
| 4D | 13 | 10 |
| 5D | 0 | 6 |
| 6D | 2 | 0 |
| 7D or more | 3 | 3 |
| Total >=3 D | 48 | 66 |
Key Financials for Zscaler (ZS)
Last 2 Fiscal Years:
| Metric | FY2024 | FY2025 |
|---|---|---|
| Revenues | $2.2 Bil | $2.7 Bil |
| Operating Income | $-121.5 Mil | $-127.1 Mil |
| Net Income | $-57.7 Mil | $-41.5 Mil |
Last 2 Fiscal Quarters:
| Metric | 2025 FQ4 | 2026 FQ1 |
|---|---|---|
| Revenues | $719.2 Mil | $788.1 Mil |
| Operating Income | $-30.9 Mil | $-36.4 Mil |
| Net Income | $-17.6 Mil | $-11.6 Mil |
The losing streak ZS stock is currently on doesn’t inspire much confidence among investors. In contrast, Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.