A Look at Zscaler Inc. (ZS) Shares in the Recent Past Indicates Growth

Zscaler Inc. (NASDAQ: ZS) stock fell -0.90% on Tuesday to $122.65 against a previous-day closing price of $123.76. With 1.37 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.6 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $126.43 whereas the lowest price it dropped to was $121.80. The 52-week range on ZS shows that it touched its highest point at $290.47 and its lowest point at $99.64 during that stretch. It currently has a 1-year price target of $171.68. Beta for the stock currently stands at 0.87.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ZS was up-trending over the past week, with a rise of 8.05%, but this was up by 8.76% over a month. Three-month performance dropped to -18.49% while six-month performance fell -21.42%. The stock lost -49.31% in the past year, while it has gained 9.61% so far this year. A look at the trailing 12-month EPS for ZS yields -2.59 with Next year EPS estimates of 1.66. For the next quarter, that number is 0.29. This implies an EPS growth rate of -43.40% for this year and 33.79% for next year. EPS is expected to grow by 53.36% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -48.50%.

Float and Shares Shorts:

At present, 143.48 million ZS shares are outstanding with a float of 86.47 million shares on hand for trading. On Oct 13, 2022, short shares totaled 6.27 million, which was 4.39% higher than short shares on Sep 14, 2022. In addition to Mr. Jagtar Singh Chaudhry as the firm’s Co-Founder, CEO & Chairman, Mr. Remo E. Canessa serves as its Chief Financial Officer.


Institutional Ownership:

Through their ownership of 47.34% of ZS’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 42.91% of ZS, in contrast to 27.26% held by mutual funds. Shares owned by individuals account for 19.81%. As the largest shareholder in ZS with 5.38% of the stake, The Vanguard Group, Inc. holds 7,759,766 shares worth 7,759,766. A second-largest stockholder of ZS, BlackRock Fund Advisors, holds 3,604,290 shares, controlling over 2.50% of the firm’s shares. Capital Research & Management Co is the third largest shareholder in ZS, holding 3,565,529 shares or 2.47% stake. With a 1.82% stake in ZS, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 2,626,856 shares are owned by the mutual fund manager. The Vanguard Mid Cap Index Fund, which owns about 1.40% of ZS stock, is the second-largest Mutual Fund holder. It holds 2,011,988 shares valued at 225.14 million. Invesco QQQ Trust holds 1.33% of the stake in ZS, owning 1,919,583 shares worth 214.8 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ZS since 41 analysts follow the stock currently. There are 27 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 11 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ZS analysts setting a high price target of $275.00 and a low target of $115.00, the average target price over the next 12 months is $168.77. Based on these targets, ZS could surge 124.22% to reach the target high and fall by -6.24% to reach the target low. Reaching the average price target will result in a growth of 37.6% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ZS will report FY 2023 earnings on 09/07/2023. Analysts have provided yearly estimates in a range of $1.30 being high and $1.19 being low. For ZS, this leads to a yearly average estimate of $1.24. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Zscaler Inc. surprised analysts by $0.03 when it reported $0.29 EPS against a consensus estimate of $0.26. The surprise factor in the prior quarter was $0.04. Based on analyst estimates, the high estimate for the next quarter is $0.31 and the low estimate is $0.28. The average estimate for the next quarter is thus $0.29.

Summary of Insider Activity:

Insiders traded ZS stock several times over the past three months with 1 Buys and 2 Sells. In these transactions, 5,000 shares were bought while 12,194 shares were sold. The number of buy transactions has increased to 12 while that of sell transactions has risen to 23 over the past year. The total number of shares bought during that period was 509,524 while 338,966 shares were sold.

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