(Reuters) - Zscaler shares tumbled 15.2% in premarket trading on Wednesday following the cybersecurity firm's downbeat annual forecasts.
Zscaler was on track to shed more than $4 billion from its market valuation of $29.2 billion if premarket losses hold.
The company expects full-year revenue in the range of $2.60 billion to $2.62 billion, while analysts estimated $2.63 billion, according to LSEG data.
"Contracted billings, a significant and growing portion of total billings, are projected to grow 7% in 1H2025, reflecting the impact of past macro challenges that have led to a historically lower growth rate in the first half," Rosenblatt Securities analyst Catharine Trebnick said in a note.
At least five brokerages cut their price targets on the stock with the median at $220, down from $224 in August.
Zscaler on Tuesday also forecast full-year adjusted net income of $2.81 to $2.87 per share, compared with estimates of $3.33.
Still, analysts at Bernstein said that demand could pick up for Zscaler, pointing to increasing "sales effectiveness".