In the latest close session, Zscaler (ZS) was down 5.23% at $174.95. The stock fell short of the S&P 500, which registered a loss of 0.87% for the day. Elsewhere, the Dow saw a downswing of 1.32%, while the tech-heavy Nasdaq depreciated by 1%.
Shares of the cloud-based information security provider have appreciated by 29.76% over the course of the past month, outperforming the Computer and Technology sector's gain of 3.23%, and the S&P 500's gain of 3.48%.
The investment community will be paying close attention to the earnings performance of Zscaler in its upcoming release. The company is slated to reveal its earnings on September 3, 2026. The company is expected to report EPS of $1.09, up 22.47% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $877.19 million, up 21.96% from the year-ago period.
For the full year, the Zacks Consensus Estimates are projecting earnings of $4.14 per share and revenue of $3.33 billion, which would represent changes of +26.22% and +24.61%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Zscaler. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 has moved 0.35% higher. At present, Zscaler boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Zscaler is currently trading at a Forward P/E ratio of 40.31. Its industry sports an average Forward P/E of 44.89, so one might conclude that Zscaler is trading at a discount comparatively.
Investors should also note that ZS has a PEG ratio of 3.02 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Security stocks are, on average, holding a PEG ratio of 3.02 based on yesterday's closing prices.
The Security industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 24, placing it within the top 10% of over 250 industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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Zscaler, Inc. (ZS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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