Shares of Zscaler (NASDAQ: ZS) are 2.9% lower to trade at $266.49 this morning, paring premarket gains despite the company inching past earnings and revenue estimates with $0.89 per share on $719.23 million in revenue. The cloud security leader delivered a strong fourth quarter, with continued growth stemming from its AI-powered model, though the fallout from a recent data breach may be spoiling its post-earnings momentum.
If today's dip holds, it would extend the equity's slide to three consecutive sessions and mark its third post-earnings slump in the last five reports. This would also be its worst single-day performance in nearly a month, continuing a downtrend that began in early July and leaving it down 11% over the past three months. Still, the 120-day moving average and the $260 level could help contain losses as the stock works to regain the optimism it enjoyed earlier this year.
Despite the move lower today, ZS received upgrades and price-target hikes from no fewer than nine outlets, including JP Morgan and Barclays Securities, while Scotiabank Securities was among the few to issue a price cut. Prior to today, analysts were largely bullish on the stock: of the 43 firms in coverage, only 11 leaned bearish.
While ZS could see a rebound, options traders don't seem to be betting on it -- the equity's 10-day and 50-day put/call volume ratios at the International Securities (ISE), Cboe Options (CBOE) and NASDAQ OMX PHLX (PHLX), rank in the 83rd and 96th percentiles, respectively.
Skepticism is spewing over into the options pits, with 19,000 puts traded so far today -- intraday activity that's 14 times the usual amount seen at this point. The most popular contract is the weekly 9/5 250-strike put, with new positions opening at the 305-strike call in the same series.
