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

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In the latest trading session, Zoom Communications (ZM - Free Report) closed at $85.65, marking a -1.13% move from the previous day. This move lagged the S&P 500's daily gain of 0.01%. Elsewhere, the Dow saw an upswing of 0.55%, while the tech-heavy Nasdaq depreciated by 0.44%.

Coming into today, shares of the video-conferencing company had lost 1.61% in the past month. In that same time, the Computer and Technology sector lost 0.69%, while the S&P 500 gained 0.86%.

Market participants will be closely following the financial results of Zoom Communications in its upcoming release. The company is predicted to post an EPS of $1.48, indicating a 4.96% growth compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.23 billion, up 4.08% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.96 per share and a revenue of $4.85 billion, signifying shifts of +7.58% and +3.99%, respectively, from the last year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Zoom Communications. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.88% higher. Right now, Zoom Communications possesses a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Zoom Communications is currently trading at a Forward P/E ratio of 14.53. This denotes a discount relative to the industry average Forward P/E of 25.1.

It is also worth noting that ZM currently has a PEG ratio of 5.06. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. ZM's industry had an average PEG ratio of 1.61 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 55, placing it within the top 23% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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