As Zscaler Inc. (NASDAQ:ZS) prepares to report its first-quarter fiscal 2026 earnings on Nov. 25, the narrative is defined by a tension between stabilizing growth and aggressive innovation.

Check out ZS's stock price here.

Management's Forecast: Margins And Milestones

Coming off a fiscal year where the company operated at the “Rule of 50,” Zscaler management has set clear expectations for the first quarter.

The company projects revenue between $772 million and $774 million, representing approximately 23% year-over-year growth. A critical focus for investors will be the projected recovery of gross margins to 80%, following a dip in the fourth quarter caused by a one-time, hardware-heavy government deployment.

CEO Jay Chaudhry continues to emphasize three massive growth vectors—AI Security, Zero Trust Everywhere, and Data Security Everywhere—which recently surpassed $1 billion in combined Annual Recurring Revenue (ARR).

Furthermore, the recent acquisition of Red Canary is expected to contribute to the fiscal year, with management assuming a $95 million ARR contribution for the full year.

See Also: Zscaler Q4 Earnings: Revenue Beat, EPS Beat, Strong Guidance, Shares Climb

The Bull Case: SASE, Synergies

Wall Street sentiment remains largely positive, driven by Zscaler's strategic positioning. Cantor Fitzgerald recently raised its price target to $365, citing “upbeat checks” and strong conviction in the Secure Access Service Edge (SASE) opportunity, alongside expected synergies from the Red Canary acquisition.

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