Zscaler (ZS) Falls More Steeply Than Broader Market: What Investors Need to Know
Zscaler (ZS) ended the recent trading session at $241.12, demonstrating a -1.6% swing from the preceding day's closing price. The stock fell short of the S&P 500, which registered a loss of 0.06% for the day. Meanwhile, the Dow experienced a rise of 0.35%, and the technology-dominated Nasdaq saw a decrease of 0.76%.
Prior to today's trading, shares of the cloud-based information security provider had gained 10.6% over the past month. This has outpaced the Computer and Technology sector's gain of 6.36% and the S&P 500's gain of 3.36% in that time.
The upcoming earnings release of Zscaler will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.58, reflecting a 56.76% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $506.63 million, up 30.71% from the prior-year quarter.
ZS's full-year Zacks Consensus Estimates are calling for earnings of $2.47 per share and revenue of $2.1 billion. These results would represent year-over-year changes of +37.99% and +29.78%, respectively.
It's also important for investors to be aware of any recent modifications to analyst estimates for Zscaler. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. As of now, Zscaler holds a Zacks Rank of #2 (Buy).
Looking at valuation, Zscaler is presently trading at a Forward P/E ratio of 99.27. For comparison, its industry has an average Forward P/E of 24.1, which means Zscaler is trading at a premium to the group.
We can additionally observe that ZS currently boasts a PEG ratio of 2.68. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Internet - Services industry currently had an average PEG ratio of 2.51 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 110, positioning it in the top 44% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Zscaler, Inc. (ZS) : Free Stock Analysis Report
