In the latest trading session, Zscaler (ZS) closed at $220.32, marking a -4.69% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 0.01% for the day. On the other hand, the Dow registered a gain of 0.55%, and the technology-centric Nasdaq decreased by 0.44%.
The cloud-based information security provider's shares have seen a decrease of 4.99% over the last month, not keeping up with the Computer and Technology sector's loss of 0.69% and the S&P 500's gain of 0.86%.
Investors will be eagerly watching for the performance of Zscaler in its upcoming earnings disclosure. In that report, analysts expect Zscaler to post earnings of $0.89 per share. This would mark year-over-year growth of 14.1%. Meanwhile, the latest consensus estimate predicts the revenue to be $798 million, indicating a 23.17% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $3.8 per share and revenue of $3.29 billion, which would represent changes of +15.85% and +23.14%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Zscaler. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
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, the Zacks Consensus EPS estimate has moved 140% higher. Right now, Zscaler possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, Zscaler is currently exchanging hands at a Forward P/E ratio of 60.9. This indicates a premium in contrast to its industry's Forward P/E of 55.69.
Investors should also note that ZS has a PEG ratio of 3.34 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Security industry was having an average PEG ratio of 2.8.
The Security industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 86, this industry ranks in the top 36% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Zscaler, Inc. (ZS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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