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Zscaler (ZS) Dips More Than Broader Market: What You Should Know

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The most recent trading session ended with Zscaler (ZS - Free Report) standing at $181.41, reflecting a -1.82% shift from the previouse trading day's closing. The stock's change was less than the S&P 500's daily loss of 1.46%. Elsewhere, the Dow saw a downswing of 1.24%, while the tech-heavy Nasdaq depreciated by 1.63%.

Shares of the cloud-based information security provider witnessed a loss of 7.07% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 3.33% and the S&P 500's gain of 1.6%.

Analysts and investors alike will be keeping a close eye on the performance of Zscaler in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.65, showcasing a 35.42% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $535.21 million, up 27.8% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.73 per share and a revenue of $2.12 billion, indicating changes of +52.51% and +31.12%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for Zscaler. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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. The Zacks Consensus EPS estimate has moved 2.21% higher within the past month. Zscaler presently features a Zacks Rank of #2 (Buy).

Digging into valuation, Zscaler currently has a Forward P/E ratio of 67.65. This denotes a premium relative to the industry's average Forward P/E of 23.73.

It is also worth noting that ZS currently has a PEG ratio of 2.4. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Internet - Services industry stood at 1.81 at the close of the market yesterday.

The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 60, placing it within the top 24% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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 to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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