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

·3 min read

Zoom Video Communications (ZM) closed the most recent trading day at $276.40, moving +0.79% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.74%.

Coming into today, shares of the video-conferencing company had lost 2.29% in the past month. In that same time, the Computer and Technology sector lost 0.81%, while the S&P 500 gained 1.34%.

Wall Street will be looking for positivity from ZM as it approaches its next earnings report date. On that day, ZM is projected to report earnings of $1.09 per share, which would represent year-over-year growth of 10.1%. Our most recent consensus estimate is calling for quarterly revenue of $1.02 billion, up 31.1% from the year-ago period.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $4.80 per share and revenue of $4.01 billion. These results would represent year-over-year changes of +43.71% and +51.41%, respectively.

Investors should also note any recent changes to analyst estimates for ZM. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 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. The Zacks Consensus EPS estimate remained stagnant within the past month. ZM currently has a Zacks Rank of #3 (Hold).

In terms of valuation, ZM is currently trading at a Forward P/E ratio of 57.19. This valuation marks a discount compared to its industry's average Forward P/E of 63.36.

Meanwhile, ZM's PEG ratio is currently 2.75. 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. The Internet - Software was holding an average PEG ratio of 4.35 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 171, which puts it in the bottom 33% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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