Zscaler (NASDAQ:ZS) is preparing to release its quarterly earnings on Monday, 2024-12-02. Here's a brief overview of what investors should keep in mind before the announcement.
Analysts expect Zscaler to report an earnings per share (EPS) of $0.63.
Zscaler bulls will hope to hear the company announce they've not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter.
New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).
Performance in Previous Earnings
In the previous earnings release, the company beat EPS by $0.19, leading to a 18.67% drop in the share price the following trading session.
Here's a look at Zscaler's past performance and the resulting price change:
| Quarter | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 |
|---|---|---|---|---|
| EPS Estimate | 0.69 | 0.65 | 0.58 | 0.49 |
| EPS Actual | 0.88 | 0.88 | 0.76 | 0.67 |
| Price Change % | -19.0% | 8.0% | -9.0% | 1.0% |
Performance of Zscaler Shares
Shares of Zscaler were trading at $204.96 as of November 28. Over the last 52-week period, shares are up 3.38%. Given that these returns are generally positive, long-term shareholders are likely bullish going into this earnings release.
Analysts' Take on Zscaler
For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Zscaler.
Analysts have provided Zscaler with 28 ratings, resulting in a consensus rating of Outperform. The average one-year price target stands at $217.32, suggesting a potential 6.03% upside.
Analyzing Analyst Ratings Among Peers
The below comparison of the analyst ratings and average 1-year price targets of Gen Digital, Monday.Com and GitLab, three prominent players in the industry, gives insights for their relative performance expectations and market positioning.
- Analysts currently favor an Neutral trajectory for Gen Digital, with an average 1-year price target of $32.5, suggesting a potential 84.14% downside.
- The consensus outlook from analysts is an Outperform trajectory for Monday.Com, with an average 1-year price target of $318.8, indicating a potential 55.54% upside.
- As per analysts' assessments, GitLab is favoring an Buy trajectory, with an average 1-year price target of $65.0, suggesting a potential 68.29% downside.
Overview of Peer Analysis
The peer analysis summary provides a snapshot of key metrics for Gen Digital, Monday.Com and GitLab, illuminating their respective standings within the industry. These metrics offer valuable insights into their market positions and comparative performance.
| Company | Consensus | Revenue Growth | Gross Profit | Return on Equity |
|---|---|---|---|---|
| Zscaler | Outperform | 30.30% | $462.66M | -1.26% |
| Gen Digital | Neutral | 3.07% | $780M | 7.92% |
| Monday.Com | Outperform | 32.67% | $225.03M | -1.28% |
| GitLab | Buy | 30.81% | $161.21M | 2.14% |
Key Takeaway:
Zscaler ranks at the top for Revenue Growth and Gross Profit among its peers. However, it ranks at the bottom for Return on Equity. Overall, Zscaler's performance is strong in terms of revenue growth and gross profit compared to its peers, but it lags behind in return on equity.
Discovering Zscaler: A Closer Look
Zscaler is a software-as-a-service, or SaaS, firm focusing on providing cloud-native cybersecurity solutions to primarily enterprise customers. Zscaler's offerings can be broadly partitioned into Zscaler Internet Access, which provides secure access to external applications, and Zscaler Private Access, which provides secure access to internal applications. The firm is headquartered in San Jose, California, and went public in 2018.
Financial Insights: Zscaler
Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.
Revenue Growth: Over the 3 months period, Zscaler showcased positive performance, achieving a revenue growth rate of 30.3% as of 31 July, 2024. This reflects a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Information Technology sector.
Net Margin: The company's net margin is below industry benchmarks, signaling potential difficulties in achieving strong profitability. With a net margin of -2.51%, the company may need to address challenges in effective cost control.
Return on Equity (ROE): Zscaler's ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of -1.26%, the company may face hurdles in achieving optimal financial returns.
Return on Assets (ROA): The company's ROA is a standout performer, exceeding industry averages. With an impressive ROA of -0.33%, the company showcases effective utilization of assets.
Debt Management: Zscaler's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.97.
To track all earnings releases for Zscaler visit their earnings calendar on our site.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
