The latest trading session saw Zscaler (ZS) ending at $202.85, denoting a -0.87% adjustment from its last day's close. This change was narrower than the S&P 500's daily loss of 2.24%. On the other hand, the Dow registered a loss of 1.73%, and the technology-centric Nasdaq decreased by 3.07%.
The the stock of cloud-based information security provider has risen by 1.51% in the past month, leading the Computer and Technology sector's loss of 6.31% and the S&P 500's loss of 4.17%.
Investors will be eagerly watching for the performance of Zscaler in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.76, reflecting a 13.64% decrease from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $666.11 million, up 20.41% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $3.08 per share and a revenue of $2.65 billion, demonstrating changes of -3.45% and +22.17%, respectively, from the preceding year.
Investors should also take note of any recent adjustments to analyst estimates for Zscaler. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 8.66% lower within the past month. Currently, Zscaler is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, Zscaler is currently trading at a Forward P/E ratio of 66.47. This denotes a premium relative to the industry's average Forward P/E of 60.14.
Investors should also note that ZS has a PEG ratio of 4.81 right now. 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 the market closed yesterday, the Security industry was having an average PEG ratio of 3.11.
The Security industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 72, placing it within the top 30% of over 250 industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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