Zoom Video Communications (ZM) Gains But Lags Market: What You Should Know

·3-min read

In the latest trading session, Zoom Video Communications (ZM) closed at $290.16, marking a +0.16% move from the previous day. This move lagged the S&P 500's daily gain of 1.22%.

Coming into today, shares of the video-conferencing company had lost 12% in the past month. In that same time, the Computer and Technology sector lost 3.53%, while the S&P 500 lost 1.49%.

Wall Street will be looking for positivity from ZM as it approaches its next earnings report date. This is expected to be June 1, 2021. In that report, analysts expect ZM to post earnings of $0.97 per share. This would mark year-over-year growth of 385%. Meanwhile, our latest consensus estimate is calling for revenue of $905.24 million, up 175.84% from the prior-year quarter.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $3.66 per share and revenue of $3.8 billion. These results would represent year-over-year changes of +9.58% and +43.28%, respectively.

Investors might also notice recent changes to analyst estimates for ZM. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable 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. Within the past 30 days, our consensus EPS projection remained stagnant. ZM is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, ZM currently has a Forward P/E ratio of 79.12. This valuation marks a premium compared to its industry's average Forward P/E of 61.56.

It is also worth noting that ZM currently has a PEG ratio of 5.46. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ZM's industry had an average PEG ratio of 3.6 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 186, putting it in the bottom 27% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.