Zoom Video Communications (ZM) Stock Sinks As Market Gains: What You Should Know
Zoom Video Communications (ZM) closed at $260.01 in the latest trading session, marking a -0.11% move from the prior day. This change lagged the S&P 500's daily gain of 1.34%. Elsewhere, the Dow gained 2.13%, while the tech-heavy Nasdaq added 0.94%.
Coming into today, shares of the video-conferencing company had gained 8.9% in the past month. In that same time, the Computer and Technology sector gained 7.45%, while the S&P 500 gained 3.92%.
ZM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.45, up 462.5% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $497.52 million, up 241.17% from the prior-year quarter.
ZM's full-year Zacks Consensus Estimates are calling for earnings of $1.26 per share and revenue of $1.80 billion. These results would represent year-over-year changes of +260% and +188.67%, respectively.
Any recent changes to analyst estimates for ZM should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.46% higher within the past month. ZM is holding a Zacks Rank of #1 (Strong Buy) right now.
Looking at its valuation, ZM is holding a Forward P/E ratio of 205.85. For comparison, its industry has an average Forward P/E of 66.09, which means ZM is trading at a premium to the group.
Also, we should mention that ZM has a PEG ratio of 8.23. 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. ZM's industry had an average PEG ratio of 3.73 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 69, which puts it in the top 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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