Zscaler (ZS) Stock Drops Despite Market Gains: Important Facts to Note
The most recent trading session ended with Zscaler (ZS) standing at $241.38, reflecting a -0.5% shift from the previouse trading day's closing. The stock's change was less than the S&P 500's daily gain of 0.08%. On the other hand, the Dow registered a loss of 0.26%, and the technology-centric Nasdaq increased by 0.36%.
The cloud-based information security provider's shares have seen an increase of 8.01% over the last month, surpassing the Computer and Technology sector's gain of 4.29% and the S&P 500's gain of 2.4%.
Market participants will be closely following the financial results of Zscaler in its upcoming release. In that report, analysts expect Zscaler to post earnings of $0.58 per share. This would mark year-over-year growth of 56.76%. Meanwhile, the latest consensus estimate predicts the revenue to be $506.63 million, indicating a 30.71% increase compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.47 per share and a revenue of $2.1 billion, representing changes of +37.99% and +29.78%, respectively, from the prior year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Zscaler. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Currently, Zscaler is carrying a Zacks Rank of #2 (Buy).
In terms of valuation, Zscaler is currently trading at a Forward P/E ratio of 98.28. This indicates a premium in contrast to its industry's Forward P/E of 25.98.
Meanwhile, ZS's PEG ratio is currently 2.65. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Internet - Services industry was having an average PEG ratio of 2.34.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 106, which puts it in the top 43% 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.
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Zscaler, Inc. (ZS) : Free Stock Analysis Report
