Zscaler (ZS) Ascends While Market Falls: Some Facts to Note

Zscaler (ZS) closed the most recent trading day at $170.31, moving +1.12% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.02%. Meanwhile, the Dow lost 0.21%, and the Nasdaq, a tech-heavy index, lost 0.08%.

Shares of the cloud-based information security provider witnessed a gain of 11.07% over the previous month, beating the performance of the Computer and Technology sector with its gain of 4.99%, and the S&P 500's gain of 3.67%.

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. Alongside, our most recent consensus estimate is anticipating revenue of $877.19 million, indicating a 21.96% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $4.14 per share and revenue of $3.33 billion. These totals would mark changes of +26.22% and +24.61%, respectively, from last year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Zscaler. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

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, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 17.08% lower. Zscaler is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, Zscaler is holding a Forward P/E ratio of 37.34. This denotes a discount relative to the industry average Forward P/E of 45.13.

It is also worth noting that ZS currently has a PEG ratio of 2.79. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. ZS's industry had an average PEG ratio of 2.79 as of yesterday's close.

The Security industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 28, this industry ranks in the top 12% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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Zscaler, Inc. (ZS) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).