Zscaler ZS shares ended the last trading session 8.5% higher at $174.69. 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 19.6% gain over the past four weeks.
The optimism surrounding the stock can be attributed to strong demand for Zscaler’s AI security and Zero Trust solutions as enterprises increase spending on securing AI applications, AI agents and cloud workloads. Further, strong momentum in usage-based AI security products, rapid growth in Zero Trust Everywhere customers, and increasing adoption of Z-Flex long-term contracts are also strengthening investor confidence in Zscaler’s long-term growth outlook.
This cloud-based information security provider is expected to post quarterly earnings of $1.00 per share in its upcoming report, which represents a year-over-year change of +19.1%. Revenues are expected to be $834.39 million, up 23.1% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and 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 #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Zscaler belongs to the Zacks Security industry. Another stock from the same industry, Okta OKTA, closed the last trading session 5.2% higher at $87.04. Over the past month, OKTA has returned 14.6%.
Okta's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.85. Compared to the company's year-ago EPS, this represents a change of -1.2%. Okta currently boasts a Zacks Rank of #3 (Hold).
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Zscaler, Inc. (ZS) : Free Stock Analysis Report
Okta, Inc. (OKTA) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
