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Zoom Video Communications (ZM) Dips More Than Broader Markets: What You Should Know

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Zoom Video Communications (ZM - Free Report) closed at $244.91 in the latest trading session, marking a -0.95% move from the prior day. This move lagged the S&P 500's daily loss of 0.02%. Elsewhere, the Dow gained 0.12%, while the tech-heavy Nasdaq lost 0.21%.

Prior to today's trading, shares of the video-conferencing company had lost 0.52% over the past month. This has lagged the Computer and Technology sector's gain of 6.62% and the S&P 500's gain of 7.01% in that time.

ZM will be looking to display strength as it nears its next earnings release, which is expected to be August 31, 2020. On that day, ZM is projected to report earnings of $0.45 per share, which would represent year-over-year growth of 462.5%. Our most recent consensus estimate is calling for quarterly revenue of $497.52 million, up 241.17% from the year-ago period.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $1.26 per share and revenue of $1.80 billion. These results would represent year-over-year changes of +260% and +188.67%, respectively.

Investors might also notice recent changes to analyst estimates for ZM. These recent revisions tend to reflect the evolving nature of short-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. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZM is currently a Zacks Rank #3 (Hold).

Investors should also note ZM's current valuation metrics, including its Forward P/E ratio of 195.52. This valuation marks a premium compared to its industry's average Forward P/E of 84.02.

We can also see that ZM currently has a PEG ratio of 7.82. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ZM's industry had an average PEG ratio of 4.63 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 107, putting it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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