ZS earnings beat low expectations but stock traded weakly; potential for stabilization after prior guidance misses.

Now, let's move on to a profit engine, Zscaler, which is on your radar today. This was one of the cybersecurity names that made it into its week of reporting. It did not achieve a similar performance to its peers.

Yes, it was a good report. I mean, look at exceeding earnings per share expectations, and exceeding revenue. They have exceeded their revenue growth figures, reaching $898.2 million .

This was a 25% year-on-year increase. Their free cash flow recorded a quarterly margin of approximately 6.8%. Free cash flow amounted to $779 million, with a profit margin of 23%.

Annual recurring revenue, I think, was a bright spot here. It rose by 25% year-on-year to reach approximately $3.77 billion. This is a positive thing. There are 785 clients who now generate more than $1 million in recurring revenue.

This represents an 18% year-on-year increase. There are 4,182 customers who generate more than $100,000 in recurring revenue. This is an increase of 20%. So, these are positive numbers.

And listening to the comments of the CEO yesterday, Jay Choudhury. He simply said that he was very optimistic. They have released their own "zero trust" version of AI agents. It is gaining momentum.

They believe this will accelerate during 2028 and 2029.

So, while the ceiling of expectations was very low for this report, we still see some weakness. I mean, the stock traded in a very wide range after the earnings , from over $201 per share down to $170.

So, perhaps there is some stability. But expectations were low. We discussed this yesterday on the " Fast Market" program. Expectations were low prior to this report. Therefore, it was not difficult to overcome.

We have seen some price target increases today. But this may help stabilize the company after two weak guidance reports in previous earnings. Remember that the stock fell sharply in recent earnings reports due to less optimistic guidance.

Therefore, this may slightly reset expectations and provide some support for the stock going forward.