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

Zscaler (ZS) closed the most recent trading day at $119.34, moving +1.56% from the previous trading session. The stock outpaced the S&P 500's daily gain of 1.4%. At the same time, the Dow added 1.05%, and the tech-heavy Nasdaq gained 2.13%.

Heading into today, shares of the cloud-based information security provider had lost 4.02% over the past month, lagging the Computer and Technology sector's gain of 1.93% and the S&P 500's gain of 4.78% 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 September 9, 2020. The company is expected to report EPS of $0.03, down 57.14% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $118.11 million, up 37.16% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for ZS. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection remained stagnant. ZS currently has a Zacks Rank of #2 (Buy).

Investors should also note ZS's current valuation metrics, including its Forward P/E ratio of 425.38. For comparison, its industry has an average Forward P/E of 33.09, which means ZS is trading at a premium to the group.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 118, which puts it in the top 47% 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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