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

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Zscaler (ZS - Free Report) closed the most recent trading day at $307.87, moving +0.71% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.11%.

Heading into today, shares of the cloud-based information security provider had gained 9.17% over the past month, outpacing the Computer and Technology sector's gain of 1.9% and the S&P 500's gain of 4.61% in that time.

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 $0.12 per share. This would mark a year-over-year decline of 14.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $212.29 million, up 48.89% from the year-ago period.

ZS's full-year Zacks Consensus Estimates are calling for earnings of $0.55 per share and revenue of $951.11 million. These results would represent year-over-year changes of +5.77% and +41.3%, respectively.

Any recent changes to analyst estimates for ZS should also be noted by investors. 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 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. The Zacks Consensus EPS estimate remained stagnant within the past month. ZS is currently a Zacks Rank #4 (Sell).

Looking at its valuation, ZS is holding a Forward P/E ratio of 554.68. This valuation marks a premium compared to its industry's average Forward P/E of 28.03.

Investors should also note that ZS has a PEG ratio of 16.1 right now. 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. ZS's industry had an average PEG ratio of 4.48 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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