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Zoom Video Communications (ZM) Gains But Lags Market: What You Should Know

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Zoom Video Communications (ZM - Free Report) closed at $91.76 in the latest trading session, marking a +0.14% move from the prior day. The stock lagged the S&P 500's daily gain of 1.1%. Elsewhere, the Dow gained 1.05%, while the tech-heavy Nasdaq added 1.32%.

Prior to today's trading, shares of the video-conferencing company had lost 5.64% over the past month. This has lagged the Computer and Technology sector's loss of 5.47% and the S&P 500's loss of 5.05% in that time.

Investors will be hoping for strength from ZM as it approaches its next earnings release, which is expected to be September 5, 2019.

It is also important to note the recent changes to analyst estimates for ZM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZM is currently a Zacks Rank #3 (Hold).

In terms of valuation, ZM is currently trading at a Forward P/E ratio of 5090.56. This represents a premium compared to its industry's average Forward P/E of 50.02.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 98, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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