Back to top

Image: Bigstock

Strength Seen in Zscaler (ZS): Can Its 3.1% Jump Turn into More Strength?

Read MoreHide Full Article

Zscaler (ZS - Free Report) shares soared 3.1% in the last trading session to close at $180.06. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 16.3% loss over the past four weeks.

The upswing was likely due to a recovery in the broader stock market after a massive sell-off last week following the announcement of a “reciprocal tariff” by President Donald Trump.

This cloud-based information security provider is expected to post quarterly earnings of $0.75 per share in its upcoming report, which represents a year-over-year change of -14.8%. Revenues are expected to be $666.11 million, up 20.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Zscaler, the consensus EPS estimate for the quarter has been revised 3.2% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ZS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Zscaler belongs to the Zacks Security industry. Another stock from the same industry, Varonis Systems (VRNS - Free Report) , closed the last trading session 0.9% lower at $38.03. Over the past month, VRNS has returned -5.8%.

For Varonis, the consensus EPS estimate for the upcoming report has changed +1.6% over the past month to -$0.05. This represents a change of -66.7% from what the company reported a year ago. Varonis currently has a Zacks Rank of #3 (Hold).


See More Zacks Research for These Tickers


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


Varonis Systems, Inc. (VRNS) - free report >>

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

Published in