In the latest close session, Zoom Communications (ZM) was down 1.5% at $81.52. The stock trailed the S&P 500, which registered a daily gain of 0.26%. Elsewhere, the Dow saw an upswing of 0.6%, while the tech-heavy Nasdaq appreciated by 0.25%.
Prior to today's trading, shares of the video-conferencing company had lost 6.75% lagged the Computer and Technology sector's gain of 1.58% and the S&P 500's gain of 1.57%.
The investment community will be paying close attention to the earnings performance of Zoom Communications in its upcoming release. In that report, analysts expect Zoom Communications to post earnings of $1.48 per share. This would mark year-over-year growth of 4.96%. Our most recent consensus estimate is calling for quarterly revenue of $1.23 billion, up 4.08% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $5.96 per share and a revenue of $4.85 billion, representing changes of +7.58% and +3.99%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Zoom Communications. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 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, there's been no change in the Zacks Consensus EPS estimate. Zoom Communications presently features a Zacks Rank of #1 (Strong Buy).
From a valuation perspective, Zoom Communications is currently exchanging hands at a Forward P/E ratio of 13.88. Its industry sports an average Forward P/E of 23.72, so one might conclude that Zoom Communications is trading at a discount comparatively.
We can additionally observe that ZM currently boasts a PEG ratio of 4.84. 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 1.43 based on yesterday's closing prices.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 57, which puts it in the top 24% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding 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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