Stocks on Wall Street ended mostly lower on Friday, with the benchmark slipping from its record high after the August badly missed expectations.
The holiday-shortened week ahead—which will see U.S. stock markets closed on Monday for Labor Day—is expected to be a quiet one on Wall Street, with little data and muted pre-earnings season trading.
Regardless of the market’s direction, below we highlight one stock likely to be in demand in the coming days and another which could see fresh losses.
Remember though, our timeframe is just for the week ahead.
Stock To Buy: Zscaler
Zscaler (NASDAQ:), which provides automated threat forensics and dynamic malware protection against advanced cyber threats, will be in focus this week, as investors await the latest financial results from the high-flying cybersecurity specialist.
The San Jose, California-based tech company—which is scheduled to report earnings after the U.S. market closes on Thursday, Sept. 9—has Wall Street’s expectations for profit and sales for 13 consecutive quarters dating back to Q3 2018, thanks to surging demand for its cloud-based security tools.
Consensus calls for earnings per share (EPS) of $0.09 for the fiscal fourth quarter, which would indicate a growth rate of 80% from EPS of $0.05 in the year-ago period.
Revenue is forecast to jump roughly 48% year-over-year to a record $186.8 million, benefitting from strong growth for its Zero Trust Exchange platform, which lets organizations provide secure access to internal applications and services from remote locations.
Calculated billings, which is revenue plus deferred revenue acquired over the quarter, will also be eyed. The key sales metric soared by 71% YoY in the previous quarter to $225 million.
In addition, investors will pay close attention to Zscaler’s outlook for the current quarter and beyond as it looks to be one of the main beneficiaries of the ongoing increase in cybersecurity spending amid the rampant .
Zscaler has enjoyed a remarkable run this year amid its emergent status as one of the leading names in the booming cybersecurity space, with shares climbing about 44% in 2021.
ZS stock closed at an all-time high of $287.40 on Friday, earning the cloud-based information security specialist a valuation of nearly $39.4 billion.
Stock To Dump: Coupang
Shares of South Korean e-commerce giant Coupang (NYSE:), often referred to as the “Amazon of South Korea,” look set to remain under pressure in the week ahead amid worries over its upcoming initial public offering (IPO) lockup expiry. The lock-up period, which prevented insiders from selling shares following the company’s IPO earlier this year, officially ends on Tuesday, Sept. 7.
Private equity and venture capital firms, such as SoftBank, hold roughly 49% of outstanding shares. If they were to sell even a fraction of their holdings, it could put large technical selling pressure on Coupang’s stock.
Coupang, which priced its IPO at $35 per share on Mar. 11, saw its stock drop to a fresh record low of $29.65 on Friday, giving the Seoul, South Korea-based e-commerce company a market cap of roughly $51.4 billion. At current levels, CPNG stock is roughly 57% below its all-time peak of $69.00 reached on its first day of trading.
Investor sentiment took a substantial hit last month, when the firm, which was founded in 2010 and has never turned a profit, reported a wider-than-expected loss for its , due mostly to the negative impact related to a fire which destroyed its biggest logistics warehouse in South Korea.
The June fire killed a firefighter and triggered a wave of public complaints and boycotts in Korea over Coupang’s handling of the incident.
Adding to the downbeat sentiment, Coupang has also been dealing with a series of allegations of tough labor conditions, including claims of overwork which have led to the deaths of employees.