Zoom Communications (ZM) closed at $74.02 in the latest trading session, marking a +0.34% move from the prior day. This move lagged the S&P 500's daily gain of 0.38%. Elsewhere, the Dow lost 0.03%, while the tech-heavy Nasdaq added 0.87%.
Coming into today, shares of the video-conferencing company had lost 0.73% in the past month. In that same time, the Computer and Technology sector lost 8.94%, while the S&P 500 lost 5.59%.
The investment community will be closely monitoring the performance of Zoom Communications in its forthcoming earnings report. The company's upcoming EPS is projected at $1.30, signifying a 3.7% drop compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $1.17 billion, indicating a 2.1% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.37 per share and revenue of $4.79 billion, indicating changes of -3.07% and +2.68%, respectively, compared to the previous year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Zoom Communications. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.62% upward. Zoom Communications is currently a Zacks Rank #2 (Buy).
Looking at its valuation, Zoom Communications is holding a Forward P/E ratio of 13.73. Its industry sports an average Forward P/E of 26.28, so one might conclude that Zoom Communications is trading at a discount comparatively.
One should further note that ZM currently holds a PEG ratio of 8.69. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 2.01.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 74, putting it in the top 30% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these 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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Zoom Communications, Inc. (ZM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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