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Zoom Communications (ZM) Ascends While Market Falls: Some Facts to Note

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In the latest trading session, Zoom Communications (ZM - Free Report) closed at $73.14, marking a +1.78% move from the previous day. The stock's change was more than the S&P 500's daily loss of 0.29%. Elsewhere, the Dow gained 0.08%, while the tech-heavy Nasdaq lost 0.4%.

Shares of the video-conferencing company have depreciated by 3.67% over the course of the past month, underperforming the Computer and Technology sector's gain of 6.11%, and the S&P 500's gain of 3.25%.

Market participants will be closely following the financial results of Zoom Communications in its upcoming release. The company plans to announce its earnings on August 21, 2025. In that report, analysts expect Zoom Communications to post earnings of $1.37 per share. This would mark a year-over-year decline of 1.44%. Simultaneously, our latest consensus estimate expects the revenue to be $1.2 billion, showing a 3% escalation compared to the year-ago quarter.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $5.58 per share and revenue of $4.8 billion. These results would represent year-over-year changes of +0.72% and +2.98%, respectively.

Investors should also take note of any recent adjustments to analyst estimates for Zoom Communications. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.59% lower. Right now, Zoom Communications possesses a Zacks Rank of #3 (Hold).

In the context of valuation, Zoom Communications is at present trading with a Forward P/E ratio of 12.87. Its industry sports an average Forward P/E of 28.79, so one might conclude that Zoom Communications is trading at a discount comparatively.

It's also important to note that ZM currently trades at a PEG ratio of 10.82. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 2.23.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 69, finds itself in the top 28% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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