Zoom Video Communications (ZM) Dips More Than Broader Markets: What You Should Know
Zoom Video Communications (ZM) closed the most recent trading day at $68.89, moving -0.78% from the previous trading session. This change lagged the S&P 500's 0.02% loss on the day. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, added 5.44%.
Prior to today's trading, shares of the video-conferencing company had gained 6.06% over the past month. This has lagged the Computer and Technology sector's gain of 11.1% and outpaced the S&P 500's gain of 4.57% in that time.
Investors will be hoping for strength from Zoom Video Communications as it approaches its next earnings release. In that report, analysts expect Zoom Video Communications to post earnings of $0.79 per share. This would mark a year-over-year decline of 38.76%. Our most recent consensus estimate is calling for quarterly revenue of $1.1 billion, up 2.67% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.95 per share and revenue of $4.38 billion, which would represent changes of -22.09% and +6.71%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Zoom Video Communications. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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 has moved 0.34% lower. Zoom Video Communications is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Zoom Video Communications is holding a Forward P/E ratio of 17.59. This represents a discount compared to its industry's average Forward P/E of 42.46.
We can also see that ZM currently has a PEG ratio of 0.9. 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. The Internet - Software industry currently had an average PEG ratio of 2.21 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
