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Zoom Video Communications (ZM) Outpaces Stock Market Gains: What You Should Know

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Zoom Video Communications (ZM - Free Report) closed at $74.54 in the latest trading session, marking a +1.3% move from the prior day. This change outpaced the S&P 500's 0.31% gain on the day. At the same time, the Dow added 0.44%, and the tech-heavy Nasdaq gained 0.26%.

Heading into today, shares of the video-conferencing company had gained 8.14% over the past month, outpacing the Computer and Technology sector's gain of 4.64% and the S&P 500's gain of 1.18% in that time.

Investors will be hoping for strength from ZM as it approaches its next earnings release.

Investors should also note any recent changes to analyst estimates for ZM. 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. 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 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ZM is currently a Zacks Rank #2 (Buy).

In terms of valuation, ZM is currently trading at a Forward P/E ratio of 271.6. This valuation marks a premium compared to its industry's average Forward P/E of 57.92.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 98, putting 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.

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


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