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Zoom Video Communications (ZM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Zoom Video Communications (ZM) closed the most recent trading day at $70.08, moving +0.1% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.05%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.11%.

Coming into today, shares of the video-conferencing company had gained 4.45% in the past month. In that same time, the Computer and Technology sector gained 4.89%, while the S&P 500 gained 4.32%.

ZM will be looking to display strength as it nears its next earnings release, which is expected to be December 5, 2019.

Investors should also note any 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.

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.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZM is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, ZM currently has a Forward P/E ratio of 376.4. This valuation marks a premium compared to its industry's average Forward P/E of 57.68.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 102, putting it in the top 40% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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