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Zscaler (ZS) Stock Sinks As Market Gains: What You Should Know

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Zscaler (ZS - Free Report) closed the most recent trading day at $134.43, moving -0.97% from the previous trading session. This change lagged the S&P 500's daily gain of 1.23%. Elsewhere, the Dow gained 1.6%, while the tech-heavy Nasdaq added 0.42%.

Heading into today, shares of the cloud-based information security provider had lost 5.92% over the past month, lagging the Computer and Technology sector's loss of 1.34% and the S&P 500's loss of 2.51% in that time.

Wall Street will be looking for positivity from ZS as it approaches its next earnings report date. The company is expected to report EPS of $0.06, up 100% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $132.40 million, up 41.47% from the year-ago period.

ZS's full-year Zacks Consensus Estimates are calling for earnings of $0.29 per share and revenue of $588.70 million. These results would represent year-over-year changes of +20.83% and +36.5%, respectively.

Any recent changes to analyst estimates for ZS should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. ZS is holding a Zacks Rank of #5 (Strong Sell) right now.

Valuation is also important, so investors should note that ZS has a Forward P/E ratio of 469.72 right now. For comparison, its industry has an average Forward P/E of 35.9, which means ZS is trading at a premium to the group.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 212, putting it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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