Zoom Communications (ZM) closed the most recent trading day at $82.01, moving -1.91% from the previous trading session. This move lagged the S&P 500's daily loss of 0.53%. Elsewhere, the Dow saw a downswing of 0.71%, while the tech-heavy Nasdaq depreciated by 0.93%.
The stock of video-conferencing company has risen by 1.25% in the past month, equaling the Computer and Technology sector and overreaching the S&P 500's gain of 1.13%.
The upcoming earnings release of Zoom Communications will be of great interest to investors. It is anticipated that the company will report an EPS of $1.43, marking a 3.62% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.21 billion, showing a 3% escalation compared to the year-ago quarter.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $5.83 per share and a revenue of $4.82 billion, signifying shifts of +5.23% and +3.41%, respectively, from the last year.
Investors might also notice recent changes to analyst estimates for Zoom Communications. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.17% increase. Zoom Communications presently features a Zacks Rank of #2 (Buy).
In terms of valuation, Zoom Communications is currently trading at a Forward P/E ratio of 14.34. This valuation marks a discount compared to its industry average Forward P/E of 29.31.
Also, we should mention that ZM has a PEG ratio of 7.13. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 2.1 at the close of the market yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 71, which puts it in the top 29% 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.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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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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