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Why Zscaler (ZS) Dipped More Than Broader Market Today

In the latest market close, Zscaler (ZS) reached $191.36, with a -0.31% movement compared to the previous day. This change lagged the S&P 500's daily loss of 0.2%. At the same time, the Dow lost 0.18%, and the tech-heavy Nasdaq lost 0.59%.

The cloud-based information security provider's stock has climbed by 18.14% in the past month, exceeding the Computer and Technology sector's gain of 10.56% and the S&P 500's gain of 7.87%.

The upcoming earnings release of Zscaler will be of great interest to investors. The company's earnings report is expected on November 27, 2023. It is anticipated that the company will report an EPS of $0.49, marking a 68.97% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $473.41 million, indicating a 33.15% upward movement from the same quarter last year.

ZS's full-year Zacks Consensus Estimates are calling for earnings of $2.23 per share and revenue of $2.06 billion. These results would represent year-over-year changes of +24.58% and +27.44%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Zscaler. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Zscaler is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, Zscaler is holding a Forward P/E ratio of 86.11. Its industry sports an average Forward P/E of 24.01, so one might conclude that Zscaler is trading at a premium comparatively.

It is also worth noting that ZS currently has a PEG ratio of 2.13. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Services industry currently had an average PEG ratio of 2.13 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 83, positioning it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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Zscaler, Inc. (ZS) : Free Stock Analysis Report

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