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Zoom Video Communications (ZM) Dips More Than Broader Market: What You Should Know

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Zoom Video Communications (ZM - Free Report) closed the most recent trading day at $66.90, moving -0.4% from the previous trading session. This change lagged the S&P 500's 0.34% loss on the day. Meanwhile, the Dow experienced a rise of 0.03%, and the technology-dominated Nasdaq saw a decrease of 0.56%.

The video-conferencing company's shares have seen a decrease of 5.31% over the last month, not keeping up with the Computer and Technology sector's gain of 1.27% and the S&P 500's gain of 2.56%.

The investment community will be paying close attention to the earnings performance of Zoom Video Communications in its upcoming release. The company is expected to report EPS of $1.15, down 5.74% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $1.13 billion, reflecting a 0.97% rise from the equivalent quarter last year.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $4.94 per share and revenue of $4.51 billion. These results would represent year-over-year changes of +13.04% and +2.6%, respectively.

Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Zoom Video Communications. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Zoom Video Communications presently features a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Zoom Video Communications is at present trading with a Forward P/E ratio of 13.6. This indicates a discount in contrast to its industry's Forward P/E of 32.74.

It is also worth noting that ZM currently has a PEG ratio of 0.41. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Internet - Software industry stood at 1.6 at the close of the market yesterday.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 33, positioning it in the top 14% of all 250+ industries.

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. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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