Zscaler Inc (NASDAQ:ZS) stock is among the worst on Wall Street today, down 25.8% to trade at $137.03. The cybersecurity specialist reported adjusted fiscal third-quarter earnings of $1.08 per share on $850 million in revenue, both of which topped estimates. However, current-quarter guidance fell short of expectations.
No fewer than 15 price-target cuts have landed in response, including a price-target cut to $200 from $223 at Rosenblatt Securities. The report has also dragged ZS sector peers Palo Alto Networks (PANW) and CrowdStrike (CRWD) 3% and 2.5% lower, respectively.
Prior to today's selloff, ZS was up 31% this quarter, pushing its 14-Day Relative Strength Index (RSI) up to 81. Now, the shares are off 40% on the year, not far off their April 10 three-year low of $114.62.
Despite the flurry of price-target cuts, downgrades could be next. Of the 45 analysts covering Zscaler stock, 36 maintain "buy" or better ratings, with one "sell" on the books.
Options traders are getting in on the action. In just the first half hour of trading, 59,000 contracts have changed hands, volume that's 15 times the average intraday amount. The weekly 5/29 120-strike put is the most popular, with new positions being opened here.
