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Zscaler (ZS) Gains As Market Dips: What You Should Know

·3 min read

In the latest trading session, Zscaler (ZS) closed at $160.88, marking a +1.48% move from the previous day. This move outpaced the S&P 500's daily loss of 1.1%. At the same time, the Dow lost 0.96%, and the tech-heavy Nasdaq lost 0.13%.

Prior to today's trading, shares of the cloud-based information security provider had gained 3.28% over the past month. This has outpaced the Computer and Technology sector's loss of 3.81% and the S&P 500's loss of 2.28% in that time.

Zscaler will be looking to display strength as it nears its next earnings release, which is expected to be September 8, 2022. On that day, Zscaler is projected to report earnings of $0.20 per share, which would represent year-over-year growth of 42.86%. Meanwhile, our latest consensus estimate is calling for revenue of $305.64 million, up 55.09% from the prior-year quarter.

Any recent changes to analyst estimates for Zscaler should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Zscaler currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Zscaler is holding a Forward P/E ratio of 153.91. This valuation marks a premium compared to its industry's average Forward P/E of 21.23.

It is also worth noting that ZS currently has a PEG ratio of 3.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ZS's industry had an average PEG ratio of 2.18 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 79, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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