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

In the latest trading session, Zoom Video Communications (ZM) closed at $321.51, marking a -0.35% move from the previous day. This change lagged the S&P 500's 0.02% loss on the day.

Coming into today, shares of the video-conferencing company had lost 9.16% in the past month. In that same time, the Computer and Technology sector gained 7.32%, while the S&P 500 gained 6.61%.

ZM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.97, up 385% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $905.24 million, up 175.84% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.66 per share and revenue of $3.8 billion, which would represent changes of +9.58% and +43.28%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for ZM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.45% higher. ZM is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ZM is holding a Forward P/E ratio of 88.11. Its industry sports an average Forward P/E of 75.15, so we one might conclude that ZM is trading at a premium comparatively.

Also, we should mention that ZM has a PEG ratio of 3.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 4.03 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 208, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

To follow ZM in the coming trading sessions, be sure to utilize Zacks.com.


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