Zscaler (ZS) closed the most recent trading day at $220.79, moving -3.44% from the previous trading session. This change lagged the S&P 500's 1.11% loss on the day. Elsewhere, the Dow saw a downswing of 0.09%, while the tech-heavy Nasdaq depreciated by 1.88%.
The cloud-based information security provider's shares have seen an increase of 17.93% over the last month, surpassing the Computer and Technology sector's gain of 3.49% and the S&P 500's gain of 2.06%.
The upcoming earnings release of Zscaler will be of great interest to investors. The company is forecasted to report an EPS of $1.16, showcasing a 20.83% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $937.61 million, up 18.97% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $4.91 per share and a revenue of $3.93 billion, signifying shifts of +16.63% and +17.22%, respectively, from the last year.
Investors should also note any recent changes to analyst estimates for Zscaler. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional 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 8.28% rise in the Zacks Consensus EPS estimate. 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 46.57. This expresses a discount compared to the average Forward P/E of 57.68 of its industry.
We can additionally observe that ZS currently boasts a PEG ratio of 3.11. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Security stocks are, on average, holding a PEG ratio of 3.2 based on yesterday's closing prices.
The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 172, putting it in the bottom 31% 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 Report
This article originally published on Zacks Investment Research (zacks.com).