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

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In the latest trading session, Zoom Video Communications (ZM - Free Report) closed at $257.12, marking a -0.95% move from the previous day. This change lagged the S&P 500's 1.05% gain on the day.

Heading into today, shares of the video-conferencing company had lost 12.98% over the past month, lagging the Computer and Technology sector's loss of 9.29% and the S&P 500's loss of 5.07% in that time.

Wall Street will be looking for positivity from ZM as it approaches its next earnings report date. In that report, analysts expect ZM to post earnings of $1.08 per share. This would mark year-over-year growth of 9.09%. Meanwhile, our latest consensus estimate is calling for revenue of $1.02 billion, up 31.1% from the prior-year quarter.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $4.78 per share and revenue of $4.01 billion. These results would represent year-over-year changes of +43.11% 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZM is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, ZM currently has a Forward P/E ratio of 54.34. This valuation marks a discount compared to its industry's average Forward P/E of 56.51.

It is also worth noting that ZM currently has a PEG ratio of 2.61. 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. Internet - Software stocks are, on average, holding a PEG ratio of 3.92 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 170, which puts it in the bottom 34% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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