Zscaler, Box
Market punishes Zscaler for dim outlook.
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Stock Analyst NotesMay 27, 2026
Zscaler ZS reported strong fiscal third-quarter results, with sales and adjusted operating margin expanding 25% and 140 basis points to $851 million and 23%, respectively. Despite 25% annual recurring revenue growth in the quarter, the firm guided to 16.5% growth next year. We saw mixed signals in the report. There were clear positives, such as 30% of the firm's new annual contract value coming from usage-based solutions and net new ARR accelerating to 24% growth. However, fiscal 2027 revenue guidance was markedly short of our outlook.
Box BOX delivered a respectable fiscal 2027 first quarter. Revenue growth returned to double digits for the first time in three years, as the higher-priced product suite expanded margins and saw stronger retention. Still, sequential guidance implies some moderation, and full-year guidance was modest. Net revenue retention increased to 105% and long-term remaining performance obligations were up 22% in constant currency, but that growth remains well below the median of our software universe and does not yet signal resilience for the Box product suite in an AI world.
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