Rather than increase revenue, Zoom Video expects gen AI tools to retain and add customers. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational xtb review purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. The company is scheduled to release its next quarterly earnings announcement on Monday, May 27th 2024.
Further, Zoom stock holds an IBD Composite Rating of 71 out of 99. Zoom earnings for the quarter ending Jan. 31 were 1.42 per share on an adjusted basis, up 16% from a year earlier. In May, Zoom announced an investment in AI startup Anthropic to support research roadmaps. Anthropic’s AI model will be integrated into Zoom’s Contact Center platform. The Nasdaq composite shot up 43% amid buzz over generative artificial intelligence technology. Meetings on the platform can host as many as 1,000 participants, while webinars can scale up to as many as 50,000.
- The recent coronavirus pandemic has resulted in the demand for Zoom’s product and services to skyrocket, resulting in a share price to reflect this increased demand.
- For fiscal 2025, Zoom said it expects earnings of $4.86 per share at the midpoint of its outlook vs. estimates of $4.66 per share.
- The IPO market is picking up, with Lyft and PagerDuty debuting in recent weeks, and Pinterest opening alongside Zoom on Thursday.
All successful companies find ways to keep expanding their business in order to create new revenue streams and remain relevant in an ever-changing world. In order to do this, businesses need the cash to invest in research and development and capital improvements. Zoom has the balance sheet to do this and has been very active in rolling out new products. Looking back at the last two years, there may be no stock more representative of the pandemic’s impact on the stock market than Zoom Video Communications (ZM 0.10%). After growing parabolically in 2020, the stock has come crashing back to earth and is down 45% year to date at the time of this writing.
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Luke Meindl has no position in any of the companies mentioned.The Motley Fool owns and recommends Alphabet (A shares), Cisco Systems, Microsoft, and Zoom Video Communications. Zoom’s management also views international expansion as an important opportunity. Continuing the two-year comparisons, that number is up from Q3 2020, when international revenue was only 20% of total revenue. If Zoom can continue to grow internationally, it opens up plenty of new revenue opportunities.
About Zoom Video Communications Stock (NASDAQ:ZM)
Zoom is more than a video chat software, as it allows users to record meetings, share one another’s screens and create annotations. This flexibility results in the ability to collaborate efficiently on projects for work or education. Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation multiples. With revenue and earnings growth expected to pull back in the years ahead, I wouldn’t be surprised to see growth-oriented investors exit their positions in Zoom stock.
Mixed analyst reports and volatile financial markets mean it is unknown how Zoom’s share price will fluctuate in the future. However, it managed to increase its stock price by 200% in a period when the S&P lexatrade review 500 dropped by 17%, and has outperformed several high-profile tech stocks like Slack and Uber. Zoom is a relatively new company that has managed to consistently increase its revenue and earnings YoY.
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Also, Zoom morphed into a social phenomenon as making video calls became routine for consumers to keep in touch with family and friends. Remote learning and needs in telemedicine also boosted demand for Zoom Video’s cloud-based services. Meanwhile, recently told its employees to report to its offices on a more regular basis. Amid Covid-19 emergency, demand for Zoom videoconferencing software surged as businesses told employees to work from home.
Zoom Video Communications (ZM) Suffers a Larger Drop Than the General Market: Key Insights
Each of these initiatives are designed to expand the business beyond the simple videoconferencing app the company became known for. Zoom Phone was called out on the most recent earnings call as having triple-digit year-over-year revenue growth, showing these new initiatives are starting to pay off. In the enterprise market for business customers, revenue rose 5% to $667.3 million, topping estimates of $658 million.
At the same time, our most recent consensus estimate is projecting a revenue of $1.13 billion, reflecting a 1.81% rise from the equivalent quarter last year. “We are impressed with Zoom’s rapid growth while generating both cash and GAAP profitability, and enterprise traction,” Rishi Jaluria, an analyst at D.A. “Furthermore, our due diligence suggests Zoom is gaining mindshare and could become the de facto standard for videoconferencing.” By taking out of the equation the volatility of the past two years and viewing Zoom’s performance on this two-year basis, we see just how remarkable the growth of its business is.
Eric S. Yuan has an approval rating of 97% among the company’s employees. This puts Eric S. Yuan in the top 30% of approval ratings compared to other CEOs of publicly-traded companies. The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within fusion markets review the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Investors should also take note of any recent adjustments to analyst estimates for Zoom Video Communications. Such recent modifications usually signify the changing landscape of near-term business trends.
