Zoom Video Communications (ZM) Gains But Lags Market: What You Should Know
In the latest trading session, Zoom Video Communications (ZM) closed at $61.43, marking a +0.23% move from the previous day. This change lagged the S&P 500's 0.83% gain on the day. At the same time, the Dow added 0.8%, and the tech-heavy Nasdaq gained 4.46%.
Heading into today, shares of the video-conferencing company had lost 14.92% over the past month, lagging the Computer and Technology sector's gain of 2.72% and the S&P 500's gain of 4.04% in that time.
Zoom Video Communications will be looking to display strength as it nears its next earnings release. On that day, Zoom Video Communications is projected to report earnings of $0.99 per share, which would represent a year-over-year decline of 3.88%. Our most recent consensus estimate is calling for quarterly revenue of $1.08 billion, up 0.91% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.20 per share and revenue of $4.44 billion, which would represent changes of -3.89% and +1.18%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Zoom Video Communications. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. Zoom Video Communications is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note Zoom Video Communications's current valuation metrics, including its Forward P/E ratio of 14.61. This represents a discount compared to its industry's average Forward P/E of 40.68.
It is also worth noting that ZM currently has a PEG ratio of 0.58. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software was holding an average PEG ratio of 1.59 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 73, putting it in the top 29% 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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Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
