Zscaler (ZS) closed at $326.33 in the latest trading session, marking a +1.03% move from the prior day. This move lagged the S&P 500's daily gain of 1.23%. Meanwhile, the Dow gained 0.72%, and the Nasdaq, a tech-heavy index, added 1.86%.
Coming into today, shares of the cloud-based information security provider had gained 9.62% in the past month. In that same time, the Computer and Technology sector gained 3.49%, while the S&P 500 gained 2.45%.
The investment community will be paying close attention to the earnings performance of Zscaler in its upcoming release. The company is predicted to post an EPS of $0.85, indicating a 10.39% growth compared to the equivalent quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $773.35 million, indicating a 23.15% upward movement from the same quarter last year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.66 per share and a revenue of $3.27 billion, indicating changes of +11.59% and +22.3%, respectively, from the former year.
Investors might also notice recent changes to analyst estimates for Zscaler. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Zscaler presently features a Zacks Rank of #4 (Sell).
Valuation is also important, so investors should note that Zscaler has a Forward P/E ratio of 88.17 right now. This signifies a premium in comparison to the average Forward P/E of 72.76 for its industry.
It's also important to note that ZS currently trades at a PEG ratio of 4.82. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Security stocks are, on average, holding a PEG ratio of 2.87 based on yesterday's closing prices.
The Security industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 209, positioning it in the bottom 16% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Zscaler, Inc. (ZS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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