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

Zacks Equity Research

Zoom Video Communications (ZM) closed at $66.08 in the latest trading session, marking a -1.42% move from the prior day. This change lagged the S&P 500's 0.39% loss on the day. Elsewhere, the Dow lost 0.95%, while the tech-heavy Nasdaq lost 0.83%.

Coming into today, shares of the video-conferencing company had lost 20.79% in the past month. In that same time, the Computer and Technology sector gained 0.35%, while the S&P 500 lost 0.1%.

Wall Street will be looking for positivity from ZM as it approaches its next earnings report date.

Investors might also notice recent changes to analyst estimates for ZM. These revisions help to show the ever-changing nature of 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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. The Zacks Consensus EPS estimate has moved 52.63% higher within the past month. ZM is currently a Zacks Rank #2 (Buy).

Looking at its valuation, ZM is holding a Forward P/E ratio of 360.38. For comparison, its industry has an average Forward P/E of 53.42, which means ZM is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 67, which puts it in the top 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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