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Zoom Video Communications (ZM) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Zoom Video Communications (ZM) closed at $90.43, marking a +0.83% move from the previous day. This change lagged the S&P 500's 1.3% gain on the day. Meanwhile, the Dow gained 1.21%, and the Nasdaq, a tech-heavy index, added 1.39%.

Coming into today, shares of the video-conferencing company had lost 1.18% in the past month. In that same time, the Computer and Technology sector lost 4.48%, while the S&P 500 lost 4.84%.

Wall Street will be looking for positivity from ZM as it approaches its next earnings report date. This is expected to be September 5, 2019.

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. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant. ZM is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, ZM is holding a Forward P/E ratio of 5045.06. For comparison, its industry has an average Forward P/E of 55.04, 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 76, which puts it in the top 30% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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