In the latest trading session, Zscaler (ZS) closed at $143.55, marking a -3.98% move from the previous day. This change lagged the S&P 500's 0.28% loss on the day. Elsewhere, the Dow lost 1.09%, while the tech-heavy Nasdaq added 0.2%.
The stock of cloud-based information security provider has risen by 18.8% in the past month, leading the Computer and Technology sector's loss of 1.22% and the S&P 500's gain of 1.64%.
Analysts and investors alike will be keeping a close eye on the performance of Zscaler in its upcoming earnings disclosure. The company is forecasted to report an EPS of $1.09, showcasing a 22.47% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $877.19 million, indicating a 21.96% growth compared to the corresponding quarter of the prior year.
ZS's full-year Zacks Consensus Estimates are calling for earnings of $4.14 per share and revenue of $3.33 billion. These results would represent year-over-year changes of +26.22% and +24.57%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Zscaler. Such recent modifications usually signify the changing landscape 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. 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, 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. The Zacks Consensus EPS estimate has moved 9.1% higher within the past month. At present, Zscaler boasts a Zacks Rank of #3 (Hold).
Looking at its valuation, Zscaler is holding a Forward P/E ratio of 36.14. For comparison, its industry has an average Forward P/E of 50.32, which means Zscaler is trading at a discount to the group.
It is also worth noting that ZS currently has a PEG ratio of 2.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ZS's industry had an average PEG ratio of 3.31 as of yesterday's close.
The Security industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 169, this industry ranks in the bottom 32% 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Zscaler, Inc. (ZS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).