In the latest trading session, Zoom Communications (ZM) closed at $83.83, marking a -2.84% move from the previous day. The stock fell short of the S&P 500, which registered a loss of 1.17% for the day. Elsewhere, the Dow lost 0.53%, while the tech-heavy Nasdaq lost 2.04%.
Heading into today, shares of the video-conferencing company had gained 6.48% over the past month, outpacing the Computer and Technology sector's gain of 5.49% and the S&P 500's gain of 2.12%.
Analysts and investors alike will be keeping a close eye on the performance of Zoom Communications in its upcoming earnings disclosure. The company's earnings report is set to go public on November 24, 2025. In that report, analysts expect Zoom Communications to post earnings of $1.43 per share. This would mark year-over-year growth of 3.62%. Simultaneously, our latest consensus estimate expects the revenue to be $1.21 billion, showing a 3% escalation compared to the year-ago quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $5.83 per share and revenue of $4.82 billion, indicating changes of +5.23% and +4.25%, 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. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.17% higher. Zoom Communications is currently a Zacks Rank #2 (Buy).
Digging into valuation, Zoom Communications currently has a Forward P/E ratio of 14.79. For comparison, its industry has an average Forward P/E of 29.38, which means Zoom Communications is trading at a discount to the group.
Investors should also note that ZM has a PEG ratio of 7.36 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Internet - Software stocks are, on average, holding a PEG ratio of 2.04 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 77, positioning it in the top 32% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming 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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