Zscaler crashes 31% on awful guidance — short the broken cybersecurity name
Cybersecurity company Zscaler just had its worst single day ever — the stock crashed 31% after reporting disappointing guidance and announcing a shakeup in its sales leadership. It has now lost more than half its value over the past year.
Idea
Zscaler didn't just miss expectations — management called its own guidance 'prudent' and shook up the sales team, which tells Wall Street that the business is struggling, not just having a bad quarter. A 31% single-day crash is the kind of event that leaves a wound: institutional holders are forced to sell, analysts slash targets, and the stock tends to keep drifting lower for weeks as the damage is reassessed. The company has already lost over 50% of its value in the past year, so there is no obvious floor of support from long-term holders. Even after the drop, the valuation remains rich for a company signaling slower growth.