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Zoom Video Communications (ZM) Gains But Lags Market: What You Should Know

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Zoom Video Communications (ZM - Free Report) closed the most recent trading day at $109.52, moving +1.35% from the previous trading session. This change lagged the S&P 500's 1.73% gain on the day. At the same time, the Dow added 1.27%, and the tech-heavy Nasdaq gained 0.28%.

Prior to today's trading, shares of the video-conferencing company had gained 11% over the past month. This has outpaced the Computer and Technology sector's gain of 10.27% and the S&P 500's gain of 9.34% in that time.

Zoom Video Communications will be looking to display strength as it nears its next earnings release, which is expected to be August 22, 2022. On that day, Zoom Video Communications is projected to report earnings of $0.92 per share, which would represent a year-over-year decline of 32.35%. Meanwhile, our latest consensus estimate is calling for revenue of $1.12 billion, up 9.28% from the prior-year quarter.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $3.78 per share and revenue of $4.54 billion. These results would represent year-over-year changes of -25.44% and +10.68%, respectively.

It is also important to note the recent changes to analyst estimates for Zoom Video Communications. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection remained stagnant. Zoom Video Communications is currently a Zacks Rank #3 (Hold).

Digging into valuation, Zoom Video Communications currently has a Forward P/E ratio of 28.61. This valuation marks a discount compared to its industry's average Forward P/E of 46.12.

Investors should also note that ZM has a PEG ratio of 2.05 right now. 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 2.81 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 136, putting it in the bottom 47% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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

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