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

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Zoom Video Communications (ZM - Free Report) closed the most recent trading day at $65.67, moving +1.51% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.29%. Elsewhere, the Dow lost 0.55%, while the tech-heavy Nasdaq added 1.24%.

Heading into today, shares of the video-conferencing company had lost 3.07% over the past month, lagging the Computer and Technology sector's gain of 1.61% and the S&P 500's gain of 3.1% in that time.

Wall Street will be looking for positivity from Zoom Video Communications as it approaches its next earnings report date. The company is expected to report EPS of $1.05, unchanged from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.11 billion, up 1.25% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.28 per share and revenue of $4.48 billion. These totals would mark changes of -2.06% and +1.88%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Zoom Video Communications. These revisions help to show the ever-changing nature of near-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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Zoom Video Communications is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Zoom Video Communications is currently trading at a Forward P/E ratio of 15.11. Its industry sports an average Forward P/E of 41.45, so we one might conclude that Zoom Video Communications is trading at a discount comparatively.

We can also see that ZM currently has a PEG ratio of 0.6. 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. Internet - Software stocks are, on average, holding a PEG ratio of 1.69 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 70, putting it in the top 28% 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.

To follow ZM in the coming trading sessions, be sure to utilize Zacks.com.


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