Why Did Zscaler Stock Drop 20% Last Month?

Shares of (NASDAQ: ZS) fell 20.4% in March, according to data provided by S&P Global Market Intelligence. Despite delivering impressive quarterly financial results, the cybersecurity stock still slid lower thanks to a combination of pessimism about its outlook, an expensive valuation, and unfavorable market conditions.

Zscaler reported quarterly earnings on Feb. 29 after the market closed for the day. The company attained $525 million in quarterly revenue, 4% above Wall Street's estimates and 35% higher than the prior year.

That translated to 108% growth in adjusted net income and a 60% increase in free cash flow. High growth paired with margin expansion is a recipe for success. The company also reported a strong net dollar retention of 117%, indicating high customer satisfaction, product enhancements, and effective sales operations.

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Source Fool.com