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

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In the latest trading session, Zscaler (ZS - Free Report) closed at $149, marking a +1.33% move from the previous day. This move outpaced the S&P 500's daily loss of 1.86%. Meanwhile, the Dow lost 2.3%, and the Nasdaq, a tech-heavy index, lost 1.64%.

Prior to today's trading, shares of the cloud-based information security provider had gained 9.28% over the past month. This has outpaced the Computer and Technology sector's gain of 9.23% and the S&P 500's gain of 7.63% in that time.

ZS will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.06, up 100% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $132.38 million, up 41.45% from the prior-year quarter.

ZS's full-year Zacks Consensus Estimates are calling for earnings of $0.29 per share and revenue of $588.87 million. These results would represent year-over-year changes of +20.83% and +36.54%, respectively.

Any recent changes to analyst estimates for ZS should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZS is holding a Zacks Rank of #5 (Strong Sell) right now.

Digging into valuation, ZS currently has a Forward P/E ratio of 509.02. Its industry sports an average Forward P/E of 38.64, so we one might conclude that ZS is trading at a premium comparatively.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 206, putting it in the bottom 19% 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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