In the latest close session, Zscaler (ZS) was up +2.67% at $237.50. This move outpaced the S&P 500's daily loss of 1.21%. Elsewhere, the Dow saw an upswing of 0.02%, while the tech-heavy Nasdaq depreciated by 2.6%.
The cloud-based information security provider's shares have seen an increase of 7.87% over the last month, surpassing the Computer and Technology sector's loss of 3.87% and the S&P 500's loss of 0.03%.
The upcoming earnings release of Zscaler will be of great interest to investors. In that report, analysts expect Zscaler to post earnings of $1.16 per share. This would mark year-over-year growth of 20.83%. Meanwhile, the latest consensus estimate predicts the revenue to be $937.56 million, indicating a 18.96% increase compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.91 per share and a revenue of $3.93 billion, representing changes of +16.63% and +17.21%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Zscaler. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 8.28% rise in the Zacks Consensus EPS estimate. Zscaler presently features a Zacks Rank of #2 (Buy).
In terms of valuation, Zscaler is currently trading at a Forward P/E ratio of 47.11. This represents a discount compared to its industry average Forward P/E of 53.13.
We can additionally observe that ZS currently boasts a PEG ratio of 3.14. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Security industry stood at 3.18 at the close of the market yesterday.
The Security industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 81, finds itself in the top 33% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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Zscaler, Inc. (ZS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).