Zscaler (ZS) Dips More Than Broader Markets: What You Should Know
Zscaler (ZS) closed at $105.45 in the latest trading session, marking a -1.81% move from the prior day. This change lagged the S&P 500's 0.21% loss on the day. Elsewhere, the Dow lost 0.42%, while the tech-heavy Nasdaq lost 0.64%.
Heading into today, shares of the cloud-based information security provider had lost 0.68% over the past month, lagging the Computer and Technology sector's gain of 10.18% and the S&P 500's gain of 7.71% in that time.
Investors will be hoping for strength from Zscaler as it approaches its next earnings release. The company is expected to report EPS of $0.39, up 129.41% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $397.8 million, up 38.7% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.52 per share and revenue of $1.56 billion. These totals would mark changes of +120.29% and +43.21%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Zscaler. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 9.52% higher within the past month. Zscaler currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that Zscaler has a Forward P/E ratio of 70.5 right now. This represents a premium compared to its industry's average Forward P/E of 23.37.
Also, we should mention that ZS has a PEG ratio of 1.18. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ZS's industry had an average PEG ratio of 1.5 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 72, which puts it in the top 29% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Zscaler, Inc. (ZS) : Free Stock Analysis Report
