The stock market closed mixed on Tuesday as blue chip stocks slid ahead of quarterly earnings from megacap tech stocks. In addition, investors are also focused on Fed’s two-day policy meeting which started on Tuesday.
Overall, S&P 500 fell 0.5% to 5,436, while NASDAQ declined 1.3% to 17,147.
Tweet of the Day
Chicks will say this and go "hell yeah" https://t.co/nWqJPnmsyN pic.twitter.com/RnChd38Hpd
— David Sharek (@GrowthStockGuy) July 24, 2024
Chart of the Day
Here is the one-year chart of Zscaler (ZS) as of June 18, 2024, when the stock was at $179.
Zscaler is not getting the attention it deserves, even though the stock is a better deal than CrowdStrike (CRWD). This is Zscaler’s 4th quarter, with the company having a Fiscal Year end on July 31. So David Sharek, Founder of School of Hard Stocks, is now looking ahead to its next Fiscal year in this example. First, both companies are growing revenues at a similar pace last quarter, with Zscaler at 32% and CrowdStrike at 33%. In terms of last quarter’s profits, Zscaler grew 83%, while CrowdStrike grew 63%. When we compare P/Es, Zscaler has a P/E of 60, while CrowdStrike is at 97. There is also a big difference in price-to-sales, with Zscaler selling for 10x next year’s revenue estimate, and CrowdStrike selling for 24x this year’s estimate. Note that CrowdStrike has a December 31 Fiscal Year end. In terms of upside, David Sharek thinks Zscaler has 45% upside to his Fair Value price of $261, while CrowdStrike is overvalued by 16%.
ZS is part of our Aggressive Growth Portfolio and Growth Portfolio.
