In the latest trading session, Zscaler (ZS) closed at $175.31, marking a +0.55% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.23%. At the same time, the Dow added 0.06%, and the tech-heavy Nasdaq gained 0.1%.
Coming into today, shares of the cloud-based information security provider had gained 7% in the past month. In that same time, the Computer and Technology sector gained 11.35%, while the S&P 500 gained 10.76%.
Investors will be hoping for strength from Zscaler as it approaches its next earnings release, which is expected to be September 8, 2022. In that report, analysts expect Zscaler to post earnings of $0.20 per share. This would mark year-over-year growth of 42.86%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $305.64 million, up 55.09% from the year-ago period.
It is also important to note the recent changes to analyst estimates for Zscaler. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about 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, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Zscaler currently has a Zacks Rank of #3 (Hold).
Digging into valuation, Zscaler currently has a Forward P/E ratio of 169.27. For comparison, its industry has an average Forward P/E of 22.67, which means Zscaler is trading at a premium to the group.
We can also see that ZS currently has a PEG ratio of 3.56. 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 1.95 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% 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.
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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