In the latest trading session, Zoom Video Communications (ZM) closed at $103.53, marking a -1.2% move from the previous day. This change lagged the S&P 500’s 0.48% gain on the day. Elsewhere, the Dow gained 0.2%, while the tech-heavy Nasdaq added 0.19%.
Prior to today’s trading, shares of the video-conferencing company had lost 15.68% over the past month. This has lagged the Computer and Technology sector’s loss of 11.75% and the S&P 500’s loss of 8.48% in that time.
Wall Street will be looking for positivity from Zoom Video Communications as it approaches its next earnings report date. This is expected to be May 23, 2022. On that day, Zoom Video Communications is projected to report earnings of $0.88 per share, which would represent a year-over-year decline of 33.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.07 billion, up 12.16% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.54 per share and revenue of $4.54 billion, which would represent changes of -30.18% and +10.78%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Zoom Video Communications. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 1.11% higher within the past month. Zoom Video Communications is currently a Zacks Rank #4 (Sell).
In terms of valuation, Zoom Video Communications is currently trading at a Forward P/E ratio of 29.57. This valuation marks a discount compared to its industry’s average Forward P/E of 52.94.
We can also see that ZM currently has a PEG ratio of 1.52. 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 industry currently had an average PEG ratio of 3.06 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 180, which puts it in the bottom 29% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.