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Zscaler (ZS) Stock Slides as Market Rises: Facts to Know Before You Trade

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Zscaler (ZS - Free Report) closed the most recent trading day at $192.70, moving -0.12% from the previous trading session. This change lagged the S&P 500's 0.53% gain on the day. At the same time, the Dow added 0.93%, and the tech-heavy Nasdaq gained 0.22%.

Shares of the cloud-based information security provider witnessed a gain of 3.03% over the previous month, beating the performance of the Computer and Technology sector with its gain of 3.02% and the S&P 500's gain of 2.69%.

Market participants will be closely following the financial results of Zscaler in its upcoming release. The company's upcoming EPS is projected at $0.69, signifying a 9.21% drop compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $634.07 million, indicating a 20.78% increase compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $2.99 per share and a revenue of $2.64 billion, indicating changes of -6.27% and +21.58%, respectively, from the former year.

Investors should also pay attention to any latest changes in analyst estimates for Zscaler. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 no change in the Zacks Consensus EPS estimate. As of now, Zscaler holds a Zacks Rank of #2 (Buy).

Looking at its valuation, Zscaler is holding a Forward P/E ratio of 64.48. This valuation marks a premium compared to its industry's average Forward P/E of 23.06.

It is also worth noting that ZS currently has a PEG ratio of 4.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Internet - Services industry held an average PEG ratio of 1.59.

The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 61, this industry ranks in the top 25% 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.

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


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