Back to top

Image: Bigstock

Don't Overlook Zoom Video (ZM) International Revenue Trends While Assessing the Stock

Read MoreHide Full Article

Did you analyze how Zoom Video Communications (ZM - Free Report) fared in its international operations for the quarter ending July 2024? Given the widespread global presence of this video-conferencing company, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.

In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

Upon examining ZM's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter stood at $1.16 billion, increasing 2.1% year over year. Now, let's delve into ZM's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

Trends in ZM's Revenue from International Markets

Of the total revenue, $142.32 million came from APAC during the last fiscal quarter, accounting for 12.2%. This represented a surprise of +0.44% as analysts had expected the region to contribute $141.69 million to the total revenue. In comparison, the region contributed $138 million, or 12.1%, and $145 million, or 12.7%, to total revenue in the previous and year-ago quarters, respectively.

During the quarter, EMEA contributed $184.48 million in revenue, making up 15.9% of the total revenue. When compared to the consensus estimate of $177.96 million, this meant a surprise of +3.66%. Looking back, EMEA contributed $184 million, or 16.1%, in the previous quarter, and $185 million, or 16.3%, in the same quarter of the previous year.

International Revenue Predictions

It is projected by analysts on Wall Street that Zoom Video will post revenues of $1.16 billion for the ongoing fiscal quarter, an increase of 2.2% from the year-ago quarter. The expected contributions from APAC and EMEA to this revenue are 12.3% and 15.3%, translating into $142.68 million and $177.42 million, respectively.

For the full year, a total revenue of $4.63 billion is expected for the company, reflecting an increase of 2.4% from the year before. The revenues from APAC and EMEA are expected to make up 12.3% and 15.5% of this total, corresponding to $567.58 million and $718.51 million respectively.

In Conclusion

Relying on global markets for revenues presents both prospects and challenges for Zoom Video. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.

Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Currently, Zoom Video holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Zoom Video's Recent Stock Market Performance

Over the past month, the stock has seen an increase of 16.7% in its value, whereas the Zacks S&P 500 composite has posted an increase of 1.5%. The Zacks Computer and Technology sector, Zoom Video's industry group, has descended 1% over the identical span. In the past three months, there's been an increase of 14.4% in the company's stock price, against a rise of 7.2% in the S&P 500 index. The broader sector has increased by 5.9% during this interval.

See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Zoom Video Communications, Inc. (ZM) - free report >>

Published in