Back to top

Image: Bigstock

Zscaler (ZS) Laps the Stock Market: Here's Why

Read MoreHide Full Article

Zscaler (ZS - Free Report) ended the recent trading session at $156.97, demonstrating a +1.68% swing from the preceding day's closing price. The stock's change was more than the S&P 500's daily gain of 1.2%. Elsewhere, the Dow gained 1.58%, while the tech-heavy Nasdaq added 1.16%.

Shares of the cloud-based information security provider have depreciated by 0.78% over the course of the past month, outperforming the Computer and Technology sector's loss of 3.32% and the S&P 500's loss of 3.58%.

The investment community will be paying close attention to the earnings performance of Zscaler in its upcoming release. The company's upcoming EPS is projected at $0.49, signifying a 68.97% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $473.41 million, indicating a 33.15% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates project earnings of $2.23 per share and a revenue of $2.06 billion, demonstrating changes of +24.58% and +27.44%, respectively, from the preceding year.

Investors might also notice recent changes to analyst estimates for Zscaler. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 1.21% fall in the Zacks Consensus EPS estimate. Currently, Zscaler is carrying a Zacks Rank of #3 (Hold).

Investors should also note Zscaler's current valuation metrics, including its Forward P/E ratio of 69.25. This denotes a premium relative to the industry's average Forward P/E of 21.58.

Also, we should mention that ZS has a PEG ratio of 1.72. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Internet - Services industry stood at 1.77 at the close of the market yesterday.

The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 70, this industry ranks in the top 28% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our individual 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Zscaler, Inc. (ZS) - free report >>

Published in