Solid economic metrics, Zscaler sells after Q1 report

Monday, December 2, 2024

Both the S&P 500 and Nasdaq indexes ended Monday’s trading session with new market highs. The S&P opened the day slightly higher and remained stable: +14 points to 6047. The Nasdaq, which outperformed the other major indices on the day and recorded its best trading session in almost a month, rose +185 points to 19,403. The small-cap Russell 2000 also appeared poised to set a new all-time closing high, but lost value in the final minutes of the session.

The Dow Jones sank early this morning and failed to gain any ground. It closed down -128 points or -0.29%. The blue-chip index was flat over the past five trading days but rose 7% over the past month.

This morning after the opening, S&P final US manufacturing PMI And ISM manufacturing The November reports were released and both exceeded expectations. For S&P, the +49.7% reading was almost a full percentage point above the expected +48.8% and even better than the downwardly revised +48.5% reported for the previous month. The ISM recorded +48.4%, almost 200 basis points better than last month’s unrevised +46.5%.

However, none of the values ​​are at the 50 mark yet (although the S&P was close). This means that both major production reports are still seeing some decline. They haven’t been above 50 since last June. Although today’s numbers are the closest to 50 since then.

Construction expensesthis time for October, expectations doubled from +0.2% to +0.4% and were even higher than the unrevised +0.1% reported for September. This is also the highest we have seen for this metric since last April.

Cloud-based security company Zscaler ZS maintained its perfect streak of no profit misses since its IPO in 2018. Earnings of 77 cents per share significantly exceeded expectations of 63 cents (and beat last year’s earnings by a good cent). Revenue came in at $628 million, beating analysts’ expectations of $605 million.

Billings increased in the quarter and the company has now surpassed half a trillion daily transactions. The guidelines have also been generally adjusted upwards. Still, Zscaler shares are down -12% in after-hours trading. At first glance, we don’t see many blemishes in this report, and the stock hasn’t become more expensive this year. It currently has a Zacks Rank #3 (Hold) with a Value Growth Momentum Score of C.

Questions or comments about this article and/or author? Click here>>

Want the latest recommendations from Zacks Investment Research? Today you can download the 7 best stocks for the next 30 days. Click here to get this free report

The story continues