Yahoo Finance Zscaler (ZS) Stock Jumps 20.6%: Will It Continue to Soar?
Zscaler ZS shares ended the last trading session 20.6% higher at $107.92. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 13.8% loss over the past four weeks.
The upswing came after the zero-trust cybersecurity specialist reported preliminary results for the third quarter of fiscal 2023, which surpassed its guidance range. Additionally, the company raised guidance for the full-fiscal 2023, thereby boosting investors’ confidence in the stock.
Based on its preliminary review, Zscaler expects to report third-quarter revenues between $415 million and $419 million, higher than its previous guidance range of $396-$398 million. The company also predicts to report a 38%-39% year-over-year increase in third-quarter calculated billings and reach the $478-$482 million band.
Furthermore, ZS now projects to report non-GAAP income from operations in the range of $60-$64 million instead of the earlier forecast in the band of $55-$56 million. On a GAAP basis, it anticipates reporting a loss from operations in the range of $55-$59 million.
Buoyed by the expectations of stronger third-quarter results, Zscaler raised guidance for the full-fiscal 2023. The company now projects revenues between $1.587 billion and $1.591 billion, up from the previous forecast in the band of $1.558-$1.563 billion. Calculated billings are now anticipated in the range of $1.97-$1.974 billion instead of the $1.935-$1.945 billion band forecast previously. It now projects non-GAAP income from operations in the range of $220-$224 million, up from the earlier guidance in the range of $213-$215 million.
This cloud-based information security provider is expected to post quarterly earnings of $0.39 per share in its upcoming report, which represents a year-over-year change of +129.4%. Revenues are expected to be $397.8 million, up 38.7% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Zscaler, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ZS going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Zscaler belongs to the Zacks Internet - Services industry. Another stock from the same industry, Bilibili BILI, closed the last trading session 1.3% lower at $19.98. Over the past month, BILI has returned -5.9%.
For Bilibili , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.44. This represents a change of +33.3% from what the company reported a year ago. Bilibili currently has a Zacks Rank of #3 (Hold).
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