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Zoom Communications (ZM) Stock Falls Amid Market Uptick: What Investors Need to Know

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In the latest close session, Zoom Communications (ZM - Free Report) was down 1.32% at $82.50. The stock's change was less than the S&P 500's daily gain of 0.41%. On the other hand, the Dow registered a gain of 0.18%, and the technology-centric Nasdaq increased by 0.31%.

The video-conferencing company's stock has climbed by 2.68% in the past month, falling short of the Computer and Technology sector's gain of 7.63% and the S&P 500's gain of 3.15%.

The investment community will be paying close attention to the earnings performance of Zoom Communications in its upcoming release. The company is forecasted to report an EPS of $1.42, showcasing a 2.9% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $1.21 billion, up 2.99% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.81 per share and a revenue of $4.82 billion, signifying shifts of +4.87% and +3.38%, respectively, from the last year.

Investors should also take note of any recent adjustments to analyst estimates for Zoom Communications. These recent revisions tend to reflect the evolving nature of short-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.12% upward. At present, Zoom Communications boasts a Zacks Rank of #1 (Strong Buy).

With respect to valuation, Zoom Communications is currently being traded at a Forward P/E ratio of 14.39. For comparison, its industry has an average Forward P/E of 31, which means Zoom Communications is trading at a discount to the group.

We can additionally observe that ZM currently boasts a PEG ratio of 7.16. 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. The Internet - Software was holding an average PEG ratio of 2.27 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 59, placing it within the top 24% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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