Zscaler (ZS) Suffers a Larger Drop Than the General Market: Key Insights
The latest trading session saw Zscaler (ZS) ending at $253.86, denoting a -0.42% adjustment from its last day's close. The stock fell short of the S&P 500, which registered a loss of 0.1% for the day. Elsewhere, the Dow saw an upswing of 0.33%, while the tech-heavy Nasdaq depreciated by 0.3%.
Shares of the cloud-based information security provider have appreciated by 10.47% over the course of the past month, underperforming the Computer and Technology sector's gain of 11.35% and outperforming the S&P 500's gain of 5.78%.
The investment community will be paying close attention to the earnings performance of Zscaler in its upcoming release. The company is slated to reveal its earnings on February 29, 2024. The company's earnings per share (EPS) are projected to be $0.58, reflecting a 56.76% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $506.63 million, indicating a 30.71% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.47 per share and revenue of $2.1 billion, which would represent changes of +37.99% and +29.78%, respectively, from the prior year.
Any recent changes to analyst estimates for Zscaler should also be noted by investors. These revisions help to show the ever-changing nature of 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. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. As of now, Zscaler holds a Zacks Rank of #2 (Buy).
Investors should also note Zscaler's current valuation metrics, including its Forward P/E ratio of 103.24. This indicates a premium in contrast to its industry's Forward P/E of 23.18.
It's also important to note that ZS currently trades at a PEG ratio of 2.79. 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. The Internet - Services was holding an average PEG ratio of 2.41 at yesterday's closing price.
The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 156, placing it within the bottom 39% of over 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
