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

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Zoom Video Communications (ZM - Free Report) closed the most recent trading day at $279.87, moving +0.82% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.48%.

Prior to today's trading, shares of the video-conferencing company had gained 1.92% over the past month. This has outpaced the Computer and Technology sector's loss of 0.56% and lagged the S&P 500's gain of 3.46% in that time.

Investors will be hoping for strength from ZM as it approaches its next earnings release. 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.

Any recent changes to analyst estimates for ZM should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. ZM currently has a Zacks Rank of #3 (Hold).

Investors should also note ZM's current valuation metrics, including its Forward P/E ratio of 57.89. This valuation marks a discount compared to its industry's average Forward P/E of 66.83.

Meanwhile, ZM's PEG ratio is currently 2.78. 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. ZM's industry had an average PEG ratio of 4.7 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 172, putting 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.

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


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