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Zscaler (ZS) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

In the latest trading session, Zscaler (ZS) closed at $70.80, marking a -1.39% move from the previous day. This move lagged the S&P 500's daily loss of 0.79%. Meanwhile, the Dow lost 0.66%, and the Nasdaq, a tech-heavy index, lost 0.68%.

Prior to today's trading, shares of the cloud-based information security provider had lost 14.52% over the past month. This has lagged the Computer and Technology sector's loss of 1.41% and the S&P 500's loss of 1.62% in that time.

Investors will be hoping for strength from ZS as it approaches its next earnings release, which is expected to be September 10, 2019. The company is expected to report EPS of $0.01, up 200% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $82.15 million, up 46.26% from the year-ago period.

Investors might also notice recent changes to analyst estimates for ZS. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ZS is currently a Zacks Rank #3 (Hold).

Digging into valuation, ZS currently has a Forward P/E ratio of 391.64. Its industry sports an average Forward P/E of 27.33, so we one might conclude that ZS is trading at a premium comparatively.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 145, which puts it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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