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Zscaler (ZS) Declines More Than Market: Some Information for Investors

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Zscaler (ZS - Free Report) closed at $249.04 in the latest trading session, marking a -1.47% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.6%. Elsewhere, the Dow saw a downswing of 0.17%, while the tech-heavy Nasdaq depreciated by 0.92%.

Heading into today, shares of the cloud-based information security provider had gained 4.94% over the past month, outpacing the Computer and Technology sector's gain of 3.1% and the S&P 500's gain of 3.56% in that time.

Market participants will be closely following the financial results of Zscaler in its upcoming release. The company plans to announce its earnings on February 29, 2024. The company is expected to report EPS of $0.58, up 56.76% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $506.63 million, indicating a 30.71% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.47 per share and revenue of $2.1 billion. These totals would mark changes of +37.99% and +29.78%, respectively, from last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Zscaler. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.09% higher. Right now, Zscaler possesses a Zacks Rank of #2 (Buy).

In terms of valuation, Zscaler is presently being traded at a Forward P/E ratio of 102.36. This valuation marks a premium compared to its industry's average Forward P/E of 28.28.

We can additionally observe that ZS currently boasts a PEG ratio of 2.76. 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 Internet - Services was holding an average PEG ratio of 1.87 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 152, positioning it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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