In the latest close session, Zscaler (ZS) was up +1.02% at $313.04. The stock lagged the S&P 500's daily gain of 1.56%. Meanwhile, the Dow experienced a rise of 1.29%, and the technology-dominated Nasdaq saw an increase of 2.21%.
Prior to today's trading, shares of the cloud-based information security provider had gained 9.42% outpaced the Computer and Technology sector's gain of 1.06% and the S&P 500's gain of 0.41%.
Investors will be eagerly watching for the performance of Zscaler in its upcoming earnings disclosure. On that day, Zscaler is projected to report earnings of $0.85 per share, which would represent year-over-year growth of 10.39%. Meanwhile, our latest consensus estimate is calling for revenue of $773.35 million, up 23.15% from the prior-year quarter.
ZS's full-year Zacks Consensus Estimates are calling for earnings of $3.66 per share and revenue of $3.27 billion. These results would represent year-over-year changes of +11.59% and +22.3%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Zscaler. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 32% higher. As of now, Zscaler holds a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Zscaler has a Forward P/E ratio of 84.58 right now. This valuation marks a premium compared to its industry average Forward P/E of 69.84.
We can additionally observe that ZS currently boasts a PEG ratio of 4.62. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Security industry currently had an average PEG ratio of 2.77 as of yesterday's close.
The Security industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 193, placing it within the bottom 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.
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Zscaler, Inc. (ZS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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