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Zscaler (ZS) Beats Stock Market Upswing: What Investors Need to Know

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The most recent trading session ended with Zscaler (ZS - Free Report) standing at $183.93, reflecting a +1.61% shift from the previouse trading day's closing. This move outpaced the S&P 500's daily gain of 0.22%. Elsewhere, the Dow lost 0.33%, while the tech-heavy Nasdaq added 0.76%.

Coming into today, shares of the cloud-based information security provider had gained 5.39% in the past month. In that same time, the Computer and Technology sector gained 2.29%, while the S&P 500 gained 1.47%.

The investment community will be closely monitoring the performance of Zscaler in its forthcoming earnings report. The company is forecasted to report an EPS of $0.63, showcasing a 5.97% downward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $605.68 million, up 21.94% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.87 per share and revenue of $2.61 billion, indicating changes of -10.03% and +20.57%, respectively, compared to the previous year.

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. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.92% lower. As of now, Zscaler holds a Zacks Rank of #4 (Sell).

From a valuation perspective, Zscaler is currently exchanging hands at a Forward P/E ratio of 63.05. This represents a premium compared to its industry's average Forward P/E of 35.45.

Meanwhile, ZS's PEG ratio is currently 8.24. 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 was holding an average PEG ratio of 2.26 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 63, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank is ordered 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.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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