Over the last month, the returns on the stock of cloud-based security software provider Zscaler have been +11.6%, while the S&P 500 composite has changed by +3.2%. The buy-and-hold option is ultimately driven by a few fundamental factors, even though reports in the press or gossip about a major shift in an organization's economic prospects typically cause its shares to trend and result in an instantaneous price change.
Zscaler Earnings Forecast
Zscaler is predicted to report $0.69 in earnings per share for this period, up +7.8% from last year's quarter. The analysts' consensus estimate has not changed for the past 30 days.
The $3.01 consensus revenue estimate for the running fiscal year indicates an increase of +68.2% from the previous year. This estimate has not changed in the past 30 days.
The consensus revenue estimate of $3.27 for the upcoming fiscal year represents a change of +8.7% compared to what Zscaler anticipated to announce a year ago. The estimate is unchanged from the previous month.
ZS's Struggle On Profit Making
Although a company's ability to grow its earnings is probably the best measure of its economic condition, if it is unable to increase revenues, not much happens. A company can hardly hope to increase its profits over the long run without also increasing its revenue. Thus, it's critical to understand a company's potential for revenue expansion.
Regarding Zscaler, the collective sales projection of $567.62 million for the present quarter indicates a +24.8% increase compared to the previous year. The estimates for the current and upcoming fiscal years, $2.14 billion and $2.6 billion, respectively, show changes of +32.5% and +21.5%.
In the most recent quarter, Zscaler reported $553.2 million in revenue, a +32.1% increase year over year. The same period's EPS of $0.88 was higher than $0.48 a year earlier.
The company has outperformed consensus earnings per share estimates in the last four quarters and consistently exceeded consensus revenue projections.
ZS Key Metrics Analysis
No investing decision can be considered efficient without considering a stock's valuation. A key factor in predicting a stock's future price performance is whether its current price accurately captures the true worth of the underlying operation and the company's potential for growth.
A company's stock can be genuinely valued, undervalued, or overvalued by comparing its present assessment multiples—such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF)—with previous values. As per the current reading, the P/S ratio is at 13.3 is the latest quarter, while the return on equity remains in the negative zone.
ZS Stock Forecast Technical Analysis
In the daily chart of ZS stock price, the overall market momentum is corrective, where the recent Zscaler stock price shows a valid bullish pressure from the double bottom pattern.
In the main chart, the bullish recovery is seen above the dynamic 20 day Exponential Moving Average, while the 100 day SMA remains on the buyers side. Moreover, the bullish breakout possibility is seen at the Cup and Handle pattern formation, where the current immediate resistance is at the 202.83 level.
Based on this outlook, a bullish break above the 202.83 level with a daily candle could validate a long opportunity, targeting the 250.00 psychological line.
On the bearish side, a downside recovery with a daily close below the 20 day EMA might extend the consolidation by finding support at the 165.00 area.
