Zoom Communications (ZM) closed at $83.32 in the latest trading session, marking a -3.44% move from the prior day. This change lagged the S&P 500's daily gain of 0.19%. Meanwhile, the Dow experienced a rise of 0.66%, and the technology-dominated Nasdaq saw a decrease of 0.03%.
The video-conferencing company's stock has dropped by 0.33% in the past month, falling short of the Computer and Technology sector's gain of 0.02% and the S&P 500's gain of 0.54%.
The investment community will be closely monitoring the performance of Zoom Communications in its forthcoming earnings report. The company is forecasted to report an EPS of $1.48, showcasing a 4.96% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $1.23 billion, up 4.08% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $5.96 per share and revenue of $4.85 billion. These totals would mark changes of +7.58% and +3.99%, respectively, from last 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 moved 0.88% higher. At present, Zoom Communications boasts a Zacks Rank of #1 (Strong Buy).
Valuation is also important, so investors should note that Zoom Communications has a Forward P/E ratio of 14.48 right now. Its industry sports an average Forward P/E of 24.2, so one might conclude that Zoom Communications is trading at a discount comparatively.
It's also important to note that ZM currently trades at a PEG ratio of 5.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 1.54 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 63, finds itself in the top 26% echelons 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.
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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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