Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Zoom Video is rated Zacks Rank #3 (Hold). For the next fiscal year, the consensus earnings estimate of $5.09 indicates a change of +1% from what Zoom Video is expected to report a year ago. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors’ interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Zacks’ 7 Best

Zoom Video Communications, Inc. provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It serves individuals; and education, entertainment/media, enterprise infrastructure, finance, government, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. The company was incorporated in 2011 and is headquartered in San Jose, California. Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock’s price direction in the near term, since it effectively harnesses the power of earnings estimate revisions.

Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. 1 analysts have bearish recommendations on Zoom Video, while 3 analysts have bullish ratings. The street high price target from Benchmark is $83, while the street low from Wells Fargo is $55. Shares of Zoom forex trading vs options trading Video Communications have an average 1-year price target of $72, representing an expected upside of 7.95%. Prior to founding Zoom, Yuan was corporate vice president of engineering at Cisco, and was a founding engineer and vice president of engineering for web and videoconferencing platform Webex.

Price Target and Rating

1. Department of Justice-led panel, named Team Telecom, was investigating the proposed merger’s potential national security risks.
2. Wondering what the next stocks will be that hit it big, with solid fundamentals?
3. Zoom is a member of the information technology sector and operates within the software industry.
4. Even though a company’s earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues.
5. Shares of Zoom Video Communications have an average 1-year price target of $72, representing an expected upside of 7.95%.

New Rank-Based ScoringMarketRank™ is calculated by averaging available category scores (with extra weight given to analysis and valuation), then ranking the company’s weighted average against that of other companies. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.

In addition to its strong quarterly results, the company issued third quarter EPS guidance above estimates and strong fiscal year 2025 guidance. Zoom Video Communications’ stock was trading at $71.91 at the start of the year. Since then, ZM shares have decreased by 2.7% and is now trading at $69.94. While media releases or rumors about a substantial change in a company’s business prospects usually make its stock ‘trending’ and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making. Zoom Video is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Here is What to Know Beyond Why Zoom Video Communications, Inc. (ZM) is a Trending Stock

Since 1988 it has more than doubled the S&P 500 with an average gain of +23.68% per year. These returns cover a period from January 1, 1988 through August 5, 2024. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month.

In the case of Zoom Video, the consensus sales estimate of $1.16 billion for the current quarter points to a year-over-year change of +2.3%. The $4.63 billion and $4.77 billion estimates for the current and next fiscal years indicate changes of +2.4% and +3%, respectively. Equity research can be a valuable source of information for learning about a company’s fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock. Zoom is a member of the information technology sector and operates within the software industry.

450 employees have rated Zoom Video Communications Chief Executive Officer Eric S. Yuan on Glassdoor.com. Eric S. Yuan has an approval rating of 97% among the company’s employees. This puts Eric S. Yuan in the top 30% of approval ratings compared to other CEOs of publicly-traded companies. Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days.

Zoom Video Communications ZM is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock. As of Aug. 23, 2021, Zoom had 240,744,533 outstanding shares of Class A common stock and 56,383,369 outstanding shares of Class B common stock.

For the next fiscal year, the consensus earnings estimate of $5.19 indicates a change of -1.7% from what Zoom Video is expected to report a year ago. For the current fiscal year, the consensus earnings estimate of $5.28 points to a change of +1.3% from the prior year. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to https://forexanalytics.info/ the creation of our proven Zacks Rank stock-rating system.

Analyst rating

A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer. For the current fiscal year, the consensus earnings estimate of $5.04 points to a change of -3.3% from the prior year.

As mentioned above, on Sept. 30, 2021, Five9 announced that the two parties had mutually agreed to abandon the deal. The company said that the agreement had not received the required number of votes from Five9 shareholders to approve the merger. Department of Justice-led panel, named Team Telecom, was investigating the proposed merger’s potential national security risks.

They include legacy web-based meeting service providers such as Cisco Systems Inc.’s (CSCO) WebEx and LogMeIn Inc.’s GoToMeeting. Rivals also include bundled productivity solution providers with video functionality such as Alphabet Inc.’s (GOOGL) Google G Suite and Microsoft Inc.’s (MSFT) Microsoft Teams. Other competitors are unified communications as a service (UCaaS) and legacy private bank exchange (PBX) providers such as 8×8 Inc. (EGHT), Avaya Holdings Corp. (AVYA), and RingCentral Inc. (RNG).