Zscaler Tumbles 2.44% as Trading Volume Plummets to 353rd in Market Activity Underperforming Tech Sector Amid Earnings Skepticism

Zscaler (ZS) closed 2025-08-14 at $270.99, down 2.44% as trading volume fell 21.79% to $280 million, ranking 353rd in market activity. The decline outperformed only the Dow (-0.03%) but lagged the Nasdaq (-0.01%) and S&P 500 (+0.03%). Over the past month, ZS shares have dropped 3.47%, underperforming the broader tech sector’s 6.37% gain.

Upcoming earnings on September 2, 2025, will be critical for sentiment. Analysts project $0.80 per share in Q3 2025, a 9.09% decline year-over-year, while revenue is expected to rise 19.11% to $706.19 million. Full-year guidance remains muted, with $3.18 in earnings per share and $2.66 billion in revenue, reflecting flat to negative growth compared to 2024. Recent analyst revisions have stagnated, with Zacks Rank assigning a #3 (Hold) rating.

Valuation metrics highlight a premium to peers. ZS trades at a forward P/E of 77.89, well above the industry average of 63.15. Its PEG ratio of 5.4 indicates low earnings growth expectations relative to valuation, a stark contrast to its industry peers’ average PEG of 2.63. The stock’s underperformance may reflect investor skepticism about its ability to sustain revenue growth amid competitive pressures in the cybersecurity sector.

A backtest of a strategy buying top 500 volume stocks and holding for one day from 2022 to 2025 yielded a 31.52% total return over 365 days, averaging 0.98% per day. The approach peaked at 7.02% in June 2023 but suffered a 4.20% loss in September 2022, underscoring its volatility. While ZS’s inclusion in such a strategy could offer short-term momentum, its current valuation and earnings outlook suggest caution for long-term investors.