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The most recent trading session ended with Zscaler (ZS) standing at $189.98, reflecting a +1.44% shift from the previouse trading day's closing. The stock exceeded the S&P 500, which registered a loss of 1.54% for the day. Meanwhile, the Dow lost 1.63%, and the Nasdaq, a tech-heavy index, lost 1.63%.
Shares of the cloud-based information security provider have depreciated by 9.25% over the course of the past month, underperforming the Computer and Technology sector's gain of 0.11% and the S&P 500's loss of 2.2%.
The investment community will be paying close attention to the earnings performance of Zscaler in its upcoming release. The company's upcoming EPS is projected at $0.69, signifying a 9.21% drop compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $634.11 million, up 20.78% from the prior-year quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.99 per share and revenue of $2.64 billion, indicating changes of -6.27% and +21.58%, respectively, compared to the previous year.
Investors might also notice recent changes to analyst estimates for Zscaler. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 33.85% higher. Zscaler currently has a Zacks Rank of #2 (Buy).
In terms of valuation, Zscaler is currently trading at a Forward P/E ratio of 62.59. This represents a premium compared to its industry's average Forward P/E of 21.96.
We can also see that ZS currently has a PEG ratio of 6.12. 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. Internet - Services stocks are, on average, holding a PEG ratio of 1.57 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 40, this industry ranks in the top 16% of all industries, numbering over 250.