Keep in mind that stocks can be volatile in the aftermath of earnings announcements. The company maintains a strong balance sheet and generates significant cash flow. Zoom is set to report third-quarter results on Monday after the bell. The Zacks Consensus Estimate how to trade forex calls for earnings of $1.31 per share, reflecting a 1.6% improvement relative to the same quarter last year. Sales are anticipated to have risen 2.34% to $1.16 billion during the third quarter.
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ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. For a company like Zoom that has been so tied in investors’ minds to the pandemic, it can be difficult to take a step back and see the forest for the trees. Taken without the noise of the past two years, Zoom is clearly a buy for existing shareholders or those investors looking to start a position.
Valuation
If Zoom can start monetizing some of the AI potential Ark Invest sees, it could inspire another bull market in its stock. Still, the bear estimate calls for a $700-per-share or less stock price, amounting to more than a 10-fold gain from current levels if that price target holds. As Wood and others have stated, Zoom is much more than an online meeting platform. It is a comprehensive communications ecosystem that includes team chat platforms, online whiteboards, VoIP phone service, workspaces, email, berkshire hathaway letters to shareholders and other services. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security.
Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer. Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation multiples.
- Alongside, our most recent consensus estimate is anticipating revenue of $1.16 billion, indicating a 2.34% upward movement from the same quarter last year.
- On the earnings front, Wall Street analysts are forecasting an average annualized growth of 28% over the next five years up to an earnings per share of $6.21 per share in fiscal year 2026.
- Zoom Video Communications (ZM 5.76%) is a bit of a mystery as a growth stock.
- The investment community will be closely monitoring the performance of Zoom Video Communications in its forthcoming earnings report.
- Zoom’s latest fiscal year (FY) was FY 2021, which ended Jan. 31, 2021.
In order to do this, businesses need the cash to invest in research and development and capital improvements. Zoom has the balance sheet to do this and has been very active in rolling out new products. By taking out of the equation the volatility of the past two years and viewing Zoom’s performance on this two-year basis, we see just how remarkable the growth of its business is.
The company is forecasted to report an EPS of $1.31, showcasing a 1.55% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $1.16 billion, indicating a 2.34% upward movement from the same quarter last year. Given the state of the company, investors should consider Zoom stock. Admittedly, investors like Ark Invest may have to adjust their expectations. With 2026 just two years away, Ark Invest’s base case estimates are looking increasingly unlikely to come to pass, and it may even fall short of the $700-per-share bear case estimate. Also, 3% revenue growth will probably not inspire growth-oriented investors.
Zoom Video Communications, Inc. Overview Software – Application / Technology
Zoom Video Communications, Inc. provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. The company was How to buy icon incorporated in 2011 and is headquartered in San Jose, California. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
Technicals
The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. Zoom shares have lost over 60% of their value in the past six months as part of a broader tech sell-off in response to rising interest rates and inflation. Revenue and earnings growth remain strong — analysts are forecasting revenue and earnings per share to grow by 54% and 46% year over year up to $4.1 billion and $4.87 per share in fiscal year 2022, respectively. Zoom has almost no debt, boasting a debt-to-equity ratio of 2% and a strong cash position of $1.3 billion. The company also grew free cash flow by over 1,100% in fiscal year 2021 up to $1.4 billion.
He said the old Eliza token’s early holders would receive 10% of the new token—a de facto bailout for being obliterated on their original investment. Artificial Intelligence (AI) might one day be humanity’s downfall, but in the meantime, humans are doing a pretty good job marketing it for their profit. The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups.