In the latest close session, Zscaler (ZS) was up +1.55% at $336.27. The stock exceeded the S&P 500, which registered a gain of 0.17% for the day. On the other hand, the Dow registered a loss of 0.48%, and the technology-centric Nasdaq increased by 0.46%.
Coming into today, shares of the cloud-based information security provider had gained 8.42% in the past month. In that same time, the Computer and Technology sector gained 6.61%, while the S&P 500 gained 2.38%.
Market participants will be closely following the financial results of Zscaler in its upcoming release. It is anticipated that the company will report an EPS of $0.85, marking a 10.39% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $773.35 million, showing a 23.15% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.66 per share and a revenue of $3.27 billion, signifying shifts of +11.59% and +22.3%, respectively, from the last year.
Any recent changes to analyst estimates for Zscaler should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. At present, Zscaler boasts a Zacks Rank of #3 (Hold).
Looking at valuation, Zscaler is presently trading at a Forward P/E ratio of 90.39. This signifies a premium in comparison to the average Forward P/E of 74.29 for its industry.
We can additionally observe that ZS currently boasts a PEG ratio of 4.94. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Security industry currently had an average PEG ratio of 2.91 as of yesterday's close.
The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 32% 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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