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Why Zoom Video Communications (ZM) Dipped More Than Broader Market Today

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Zoom Video Communications (ZM - Free Report) closed the most recent trading day at $69.10, moving -1.93% from the previous trading session. This change lagged the S&P 500's 0.37% loss on the day. Meanwhile, the Dow lost 0.62%, and the Nasdaq, a tech-heavy index, lost 0.19%.

Heading into today, shares of the video-conferencing company had lost 1.26% over the past month, lagging the Computer and Technology sector's gain of 1.22% and the S&P 500's gain of 1.56% in that time.

The investment community will be closely monitoring the performance of Zoom Video Communications in its forthcoming earnings report. In that report, analysts expect Zoom Video Communications to post earnings of $1.15 per share. This would mark a year-over-year decline of 5.74%. Meanwhile, our latest consensus estimate is calling for revenue of $1.13 billion, up 0.97% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $4.94 per share and a revenue of $4.51 billion, representing changes of +13.04% and +2.6%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Zoom Video Communications. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Zoom Video Communications is currently a Zacks Rank #1 (Strong Buy).

In the context of valuation, Zoom Video Communications is at present trading with a Forward P/E ratio of 14.27. This indicates a discount in contrast to its industry's Forward P/E of 34.28.

Meanwhile, ZM's PEG ratio is currently 0.43. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.76.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 48, positioning it in the top 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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