Zscaler (ZS) closed the most recent trading day at $188.05, moving -6.26% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 0.84% for the day. On the other hand, the Dow registered a loss of 0.34%, and the technology-centric Nasdaq decreased by 1.43%.
The stock of cloud-based information security provider has fallen by 9.94% in the past month, lagging the Computer and Technology sector's gain of 1.75% and the S&P 500's gain of 1.8%.
The investment community will be closely monitoring the performance of Zscaler in its forthcoming earnings report. The company is expected to report EPS of $0.89, up 14.1% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $798 million, indicating a 23.17% growth compared to the corresponding quarter of the prior year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.8 per share and revenue of $3.29 billion. These totals would mark changes of +15.85% and +23.17%, respectively, from 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 such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 16.67% rise in the Zacks Consensus EPS estimate. Zscaler is currently sporting a Zacks Rank of #3 (Hold).
In the context of valuation, Zscaler is at present trading with a Forward P/E ratio of 52.84. This signifies a premium in comparison to the average Forward P/E of 47.58 for its industry.
We can also see that ZS currently has a PEG ratio of 2.89. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Security industry held an average PEG ratio of 2.49.
The Security industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 207, which puts it in the bottom 16% of all 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding 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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