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Zoom Video Communications (ZM) Stock Moves -0.97%: What You Should Know

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Zacks Equity Research
·3 min read
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Zoom Video Communications (ZM) closed at $370.74 in the latest trading session, marking a -0.97% move from the prior day. This move was narrower than the S&P 500's daily loss of 2.57%. Elsewhere, the Dow lost 2.05%, while the tech-heavy Nasdaq lost 2.61%.

Investors will be hoping for strength from ZM as it approaches its next earnings release. The company is expected to report EPS of $0.78, up 420% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $809.07 million, up 329.78% from the year-ago period.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $2.89 per share and revenue of $2.58 billion. These results would represent year-over-year changes of +725.71% and +314.03%, respectively.

Investors should also note any recent changes to analyst estimates for ZM. Recent revisions tend to reflect the latest 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. 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. The Zacks Consensus EPS estimate has moved 1.08% higher within the past month. ZM is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ZM is holding a Forward P/E ratio of 135.49. For comparison, its industry has an average Forward P/E of 87.6, which means ZM is trading at a premium to the group.

Meanwhile, ZM's PEG ratio is currently 5.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 4.42 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 182, which puts it in the bottom 29% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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