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

Zacks Equity Research

In the latest trading session, Zscaler (ZS) closed at $82.28, marking a -1.21% move from the previous day. This change lagged the S&P 500's 0.23% gain on the day. At the same time, the Dow added 0.85%, and the tech-heavy Nasdaq lost 0.08%.

Coming into today, shares of the cloud-based information security provider had gained 7.93% in the past month. In that same time, the Computer and Technology sector gained 5.16%, while the S&P 500 gained 3.84%.

Wall Street will be looking for positivity from ZS as it approaches its next earnings report date. In that report, analysts expect ZS to post earnings of $0.01 per share. This would mark year-over-year growth of 200%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $82.15 million, up 46.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.17 per share and revenue of $297.53 million. These totals would mark changes of +230.77% and +56.45%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for ZS. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. Within the past 30 days, our consensus EPS projection remained stagnant. ZS is currently a Zacks Rank #2 (Buy).

Looking at its valuation, ZS is holding a Forward P/E ratio of 480.52. This valuation marks a premium compared to its industry's average Forward P/E of 29.64.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 109, putting it in the top 43% 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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