Are Zscaler Inc. (NASDAQ:ZS) Prospects Worsening?

Zscaler Inc. (NASDAQ:ZS) shares traded higher over the last trading session, gaining 29.41% on 05/29/20. The shares fell to a low of $85.50 before closing at $98.09. Intraday shares traded counted 22.71 million, which was -647.01% lower than its 30-day average trading volume of 3.04M. ZS’s previous close was $75.80 while the outstanding shares total 128.41M. The firm stock’s Relative Strength Index (RSI) is 80.67, with weekly volatility at 7.44% and ATR at 4.82. The ZS stock’s 52-week price range has touched low of $35.00 and a $89.54 high.

Investors have identified the Software – Infrastructure company Zscaler Inc. as an interesting stock but before investments are made there, an in-depth look at its trading activities will have to be conducted. The share is trading with a market value of around $9.81 billion, the company now has both obstacles and catalysts that affect them and they came from their mode of operations. With the company affected by events currently, it is a perfect time to analyze the numbers behind the firm in order to come up with a rather realistic picture of what this stock is.

Zscaler Inc. (ZS) Fundamentals that are to be considered.

When analyzing a stock, the first fundamental thing to take into account is the balance sheet. How healthy the balance sheet of a company is will determine if the company will be able to carry out all its financial and non-financial obligations and also keep the faith of its investors. For ZS, the company has in raw cash 76.53 million on their books with 11.14 million currently as liabilities. How the trend is over time is what investors should be concerned about. The company has a healthy balance sheet as their debt profile has been on an incline. In terms of their assets, the company currently has 523142000 million total, with 303663000 million as their total liabilities.

ZS were able to record 7.49 million as free cash flow during the third quarter of the year, this saw their quarterly net cash flow reduce by -1.95 million. In cash movements, the company had a total of 26.86 million as operating cash flow.

Potential earnings growth for Zscaler Inc. (ZS)

In order to determine the future investment potential for this stock, we will have to analyze key trends that affect it. During the third quarter of the year, Zscaler Inc. recorded a total of 101.27 million in revenue. This figure implies that they witnessed a quarterly year/year change in their earnings with 26.63% coming in sequential stages and their sales for the third quarter increasing by 7.58%.

What matters though is how it ends. When the core data for the company is broken down, then the stock sounds interesting. The company spent 20.24 million trying to sell their products during the last quarter, with the result yielding a gross income of 81.03 million. This allows shareholders to hold on to 128.41M with the revenue now reading -0.23 cents per share. This is a figure that is close to analyst’s prediction for their fourth quarter (-0.17 cents a share).

Having a look at the company’s valuation, the company is expected to record -0.12 total earnings per share during the next fiscal year. It is very important though to remember that the importance of trend far outweighs that of outlook. This analysis has been great and getting further updates on ZS sounds very interesting.

Is the stock of ZS attractive?

In related news, President of R&D and CTO, Sinha Amit sold 4,000 shares of the company’s stock in a transaction that recorded on May 26. The sale was performed at an average price of 77.62, for a total value of 310,484. As the sale deal closes, the President of R&D and CTO, Sinha Amit now sold 4,000 shares of the company’s stock, valued at 300,737. Also, President of R&D and CTO, Sinha Amit sold 4,000 shares of the company’s stock in a deal that was recorded on May 12. The shares were price at an average price of 77.39 per share, with a total market value of 309,578. Following this completion of acquisition, the Chief Legal Officer, Schlossman Robert now holds 10,900 shares of the company’s stock, valued at 818,513. In the last 6 months, insiders have changed their ownership in shares of company stock by 1.00%.

11 out of 24 analysts covering the stock have rated it a Buy, while 10 have maintained a Hold recommendation on Zscaler Inc.. 1 analysts has assigned a Sell rating on the ZS stock. The 12-month mean consensus price target for the company’s shares has been set at $67.90.