All You Need to Know About Zscaler (ZS) Rating Upgrade to Buy

Core Viewpoint - Zscaler (ZS) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [3]. Zscaler's Earnings Outlook - The recent upgrade for Zscaler reflects an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - Zscaler is projected to earn $2.99 per share for the fiscal year ending July 2025, representing a year-over-year change of -6.3% [7]. - Over the past three months, the Zacks Consensus Estimate for Zscaler has increased by 56.6%, indicating a positive trend in earnings estimates [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [6]. - The upgrade of Zscaler to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].