What happened

Shares of Zscaler (NASDAQ:ZS) plummeted 31.2% last month, according to data provided by S&P Global Market Intelligence, after the cybersecurity specialist issued disappointing sales and profit guidance for the year ahead.

So what

Zscaler's fourth-quarter revenue surged 53% year over year to $86.1 million. The cloud-security company's non-GAAP (adjusted) earning per share, meanwhile, came in at $0.07, up from a loss of $0.01 in the year-ago quarter. Wall Street had expected revenue and non-GAAP EPS of only $82.8 million and $0.01, respectively. 

"Our strong fiscal 2019 results demonstrate our ability to drive growth and profitability while investing in our business, as we continue to see enterprises transforming their network and security to realize the benefits of the cloud," CEO Jay Chaudhry said in a press release. 

A line chart that slopes upward and then falls, with a portion of the line that continued to slope upward erased

Image source: Getty Images.

But investors appeared to focus more on Zscaler's guidance. Management is forecasting fiscal 2020 revenue to rise approximately 32% year over year to a range of $395 million to $405 million. While impressive for most companies, this would represent a marked deceleration from Zscaler's 59% revenue growth in fiscal 2019. 

Worse still, Zscaler is guiding for its full-year non-GAAP earnings per share to decline to a range of $0.12 to $0.15, down from $0.22 in 2019 and well below the $0.19 analysts had projected. 

Now what

After hitting an all-time high of just under $90 in July, Zscaler's share price has been cut in half. Fears of intensifying competition and a corresponding deceleration in Zscaler's growth rate have taken a toll on its stock in recent months. Management's underwhelming guidance has only added to these concerns.

Even after these steep declines, Zscaler -- which is currently trading at about 20 times sales -- still isn't cheap. But as a leading provider of cloud-based cybersecurity solutions, it remains an interesting stock for aggressive growth investors to watch.