Zoom Communications (ZM) closed the most recent trading day at $92.15, moving -2.99% from the previous trading session. The stock trailed the S&P 500, which registered a daily loss of 0.01%. Meanwhile, the Dow lost 0.13%, and the Nasdaq, a tech-heavy index, lost 0.16%.
Heading into today, shares of the video-conferencing company had gained 14.18% over the past month, outpacing the Computer and Technology sector's loss of 1.54% and the S&P 500's loss of 0.28%.
Investors will be eagerly watching for the performance of Zoom Communications in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on February 25, 2026. On that day, Zoom Communications is projected to report earnings of $1.48 per share, which would represent year-over-year growth of 4.96%. In the meantime, our current consensus estimate forecasts the revenue to be $1.23 billion, indicating a 4.08% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $5.96 per share and revenue of $4.85 billion, which would represent changes of +7.58% and +4%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for Zoom Communications. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.22% increase. Currently, Zoom Communications is carrying a Zacks Rank of #2 (Buy).
Looking at valuation, Zoom Communications is presently trading at a Forward P/E ratio of 16. Its industry sports an average Forward P/E of 20.43, so one might conclude that Zoom Communications is trading at a discount comparatively.
We can also see that ZM currently has a PEG ratio of 5.57. 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 Internet - Software was holding an average PEG ratio of 1.13 at yesterday's closing price.
The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 139, placing it within the bottom 44% of over 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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next 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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