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Zoom Jumps on Upbeat Earnings & View: ETFs in Focus
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On Feb 27, Zoom Video Communications (ZM - Free Report) came out with quarterly earnings of $1.22 per share, beating the Zacks Consensus Estimate of $0.79 per share, after market closed. This compares to earnings of $1.29 per share a year ago. These figures are adjusted for non-recurring items. Zoom’s earnings beat history has been impressive.
Zoom Video, which belongs to the Zacks Internet - Software industry, posted revenues of $1.12 billion for the quarter ended January 2023, surpassing the Zacks Consensus Estimate by 1.62%. This compares to year-ago revenues of $1.07 billion. The company has topped consensus revenue estimates three times over the last four quarters.
Shares jumped 6.5% in the pre-market session on Feb 28.
Inside the Results
Zoom’s revenue increased 4% year over year in the quarter. This marked a massive slowdown from the quadrupling of revenue that Zoom witnessed in 2020 and 2021, when consumers and businesses rushed to use the video service due to the Covid-19-induced stay-at-home trend.
Growth will likely to slow down this year. Zoom expects revenues between $4.435 billion to $4.455 billion in revenue, implying 1.1% growth, while Zacks Consensus Estimate was pegged at $4.58 billion. The company said adjusted earnings per share will likely be between $4.11 and $4.18, beating the $3.67 Zacks Consensus Estimate.
For the fiscal first quarter, adjusted earnings will be 96 cents to 98 cents per share on revenue of $1.080 billion to $1.085 billion. Zacks Consensus Estimates were 86 cents in adjusted earnings per share and $1.11 billion in revenue.
Zoom is probably winning on cost-cutting measure. Zoom Video said in early February that it will cut 1,300 jobs, about 15% of its workforce. During the fiscal fourth quarter, Zoom said it would launch email and calendar services, together with a virtual agent chatbot for managing customer queries.
Upbeat Zacks Rank
The stock has a Zacks Rank #2 (Buy). The stock hails from the Zacks Industry that falls into the top 33% segment. Its Zacks Sector Rank too falls into the top 50% segment.
Against this backdrop, below we highlight a few ETF that are heavy on Zoom and may benefit from the spike in Zoom’s share price.
ARKK is an actively managed Exchange Traded Fund that looks to track long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation. The fund charges 75 bps in fees. Zoom takes the second spot in the fund.
ARK Next Generation Internet ETF (ARKW - Free Report) – Zoom’s Weight 7.13%
ARKW is an actively managed Exchange Traded Fund that looks to offer long-term growth of capital by investing under normal circumstances primarily (at least 80% of its assets) in domestic and U.S. exchange-traded foreign equity securities of companies that are relevant to the Fund’s investment theme of next generation internet. Zoom takes the fourth spot in the fund. The fund charges 88 bps in fees.
SPRX invests in companies that look to benefit from breakthrough trends in industrial technology. Zoom takes the tenth spot in the fund. The fund charges 75 bps in fees.
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Zoom Jumps on Upbeat Earnings & View: ETFs in Focus
On Feb 27, Zoom Video Communications (ZM - Free Report) came out with quarterly earnings of $1.22 per share, beating the Zacks Consensus Estimate of $0.79 per share, after market closed. This compares to earnings of $1.29 per share a year ago. These figures are adjusted for non-recurring items. Zoom’s earnings beat history has been impressive.
Zoom Video, which belongs to the Zacks Internet - Software industry, posted revenues of $1.12 billion for the quarter ended January 2023, surpassing the Zacks Consensus Estimate by 1.62%. This compares to year-ago revenues of $1.07 billion. The company has topped consensus revenue estimates three times over the last four quarters.
Shares jumped 6.5% in the pre-market session on Feb 28.
Inside the Results
Zoom’s revenue increased 4% year over year in the quarter. This marked a massive slowdown from the quadrupling of revenue that Zoom witnessed in 2020 and 2021, when consumers and businesses rushed to use the video service due to the Covid-19-induced stay-at-home trend.
Growth will likely to slow down this year. Zoom expects revenues between $4.435 billion to $4.455 billion in revenue, implying 1.1% growth, while Zacks Consensus Estimate was pegged at $4.58 billion. The company said adjusted earnings per share will likely be between $4.11 and $4.18, beating the $3.67 Zacks Consensus Estimate.
For the fiscal first quarter, adjusted earnings will be 96 cents to 98 cents per share on revenue of $1.080 billion to $1.085 billion. Zacks Consensus Estimates were 86 cents in adjusted earnings per share and $1.11 billion in revenue.
Zoom is probably winning on cost-cutting measure. Zoom Video said in early February that it will cut 1,300 jobs, about 15% of its workforce. During the fiscal fourth quarter, Zoom said it would launch email and calendar services, together with a virtual agent chatbot for managing customer queries.
Upbeat Zacks Rank
The stock has a Zacks Rank #2 (Buy). The stock hails from the Zacks Industry that falls into the top 33% segment. Its Zacks Sector Rank too falls into the top 50% segment.
Against this backdrop, below we highlight a few ETF that are heavy on Zoom and may benefit from the spike in Zoom’s share price.
ETFs in Focus
ARK Innovation ETF (ARKK - Free Report) – Zoom’s Weight 8.37%
ARKK is an actively managed Exchange Traded Fund that looks to track long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation. The fund charges 75 bps in fees. Zoom takes the second spot in the fund.
ARK Next Generation Internet ETF (ARKW - Free Report) – Zoom’s Weight 7.13%
ARKW is an actively managed Exchange Traded Fund that looks to offer long-term growth of capital by investing under normal circumstances primarily (at least 80% of its assets) in domestic and U.S. exchange-traded foreign equity securities of companies that are relevant to the Fund’s investment theme of next generation internet. Zoom takes the fourth spot in the fund. The fund charges 88 bps in fees.
Spear Alpha ETF (SPRX - Free Report) – Weight 4.29%
SPRX invests in companies that look to benefit from breakthrough trends in industrial technology. Zoom takes the tenth spot in the fund. The fund charges 75 bps in fees.