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

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Zscaler (ZS - Free Report) closed the most recent trading day at $250.81, moving +1.79% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.85%.

Coming into today, shares of the cloud-based information security provider had gained 3.22% in the past month. In that same time, the Computer and Technology sector gained 3.07%, while the S&P 500 gained 2.85%.

Investors will be hoping for strength from ZS as it approaches its next earnings release, which is expected to be September 9, 2021. The company is expected to report EPS of $0.09, up 80% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $187.84 million, up 49.21% from the year-ago period.

It is also important to note the recent changes to analyst estimates for ZS. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ZS is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, ZS is holding a Forward P/E ratio of 441.75. Its industry sports an average Forward P/E of 26.27, so we one might conclude that ZS is trading at a premium comparatively.

Also, we should mention that ZS has a PEG ratio of 8.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services industry currently had an average PEG ratio of 3.41 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 178, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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