Zacks Equity Research
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Zoom Communications (ZM) ended the recent trading session at $76.05, demonstrating a +1.12% change from the preceding day’s closing price. The stock’s change was more than the S&P 500’s daily gain of 0.78%. Meanwhile, the Dow experienced a rise of 1.14%, and the technology-dominated Nasdaq saw an increase of 0.61%.
Prior to today’s trading, shares of the video-conferencing company had lost 1.62% lagged the Computer and Technology sector’s gain of 8.76% and the S&P 500’s gain of 5.88%.
The upcoming earnings release of Zoom Communications will be of great interest to investors. The company’s earnings per share (EPS) are projected to be $1.37, reflecting a 1.44% decrease from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $1.2 billion, indicating a 3.02% upward movement from the same quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.59 per share and a revenue of $4.81 billion, signifying shifts of +0.9% and +2.99%, respectively, from the last year.
Investors should also take note of any recent adjustments to analyst estimates for Zoom Communications. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Zoom Communications is holding a Zacks Rank of #1 (Strong Buy) right now.
In terms of valuation, Zoom Communications is presently being traded at a Forward P/E ratio of 13.46. Its industry sports an average Forward P/E of 29.16, so one might conclude that Zoom Communications is trading at a discount comparatively.
It is also worth noting that ZM currently has a PEG ratio of 7.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. ZM’s industry had an average PEG ratio of 2.2 as of yesterday’s close.
