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Why the Market Dipped But Zscaler (ZS) Gained Today

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Zscaler (ZS - Free Report) closed the latest trading day at $172.97, indicating a +0.01% change from the previous session's end. The stock outperformed the S&P 500, which registered a daily loss of 0.22%. Meanwhile, the Dow experienced a rise of 0.06%, and the technology-dominated Nasdaq saw a decrease of 0.52%.

Prior to today's trading, shares of the cloud-based information security provider had lost 12.34% over the past month. This has lagged the Computer and Technology sector's loss of 1.64% and the S&P 500's loss of 1.66% in that time.

The upcoming earnings release of Zscaler will be of great interest to investors. The company is predicted to post an EPS of $0.65, indicating a 35.42% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $535.21 million, up 27.8% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.73 per share and revenue of $2.12 billion. These totals would mark changes of +52.51% and +31.12%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Zscaler. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

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.

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. Over the past month, there's been a 2.21% rise in the Zacks Consensus EPS estimate. As of now, Zscaler holds a Zacks Rank of #2 (Buy).

In terms of valuation, Zscaler is currently trading at a Forward P/E ratio of 63.32. This valuation marks a premium compared to its industry's average Forward P/E of 23.14.

Also, we should mention that ZS has a PEG ratio of 2.25. 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 industry had an average PEG ratio of 1.75 as trading concluded yesterday.

The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 53, placing it within the top 22% of over 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.

Keep in mind to rely on to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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