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Zscaler (ZS) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Zscaler (ZS - Free Report) closed at $127.76, marking a -0.78% move from the previous day. This change lagged the S&P 500's daily loss of 0.14%. At the same time, the Dow added 0.9%, and the tech-heavy Nasdaq lost 1.37%.

Prior to today's trading, shares of the cloud-based information security provider had lost 14.81% over the past month. This has lagged the Computer and Technology sector's gain of 2.34% and the S&P 500's gain of 2.25% in that time.

Wall Street will be looking for positivity from ZS as it approaches its next earnings report date. This is expected to be December 2, 2020. On that day, ZS is projected to report earnings of $0.06 per share, which would represent year-over-year growth of 100%. 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.

Investors might also notice recent changes to analyst estimates for ZS. 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 company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ZS currently has a Zacks Rank of #4 (Sell).

In terms of valuation, ZS is currently trading at a Forward P/E ratio of 445.57. This valuation marks a premium compared to its industry's average Forward P/E of 34.56.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 213, putting it in the bottom 17% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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