Zoom Video Communications (ZM) is gearing up to unveil its third-quarter earnings results after the market closes on Monday, November 25th. This announcement is highly anticipated, as the video conferencing giant continues to navigate a post-pandemic market landscape. Analysts are projecting robust numbers, with expectations focused on the company’s continued growth and ability to maintain its market position.
The consensus estimate points to earnings per share (EPS) of $1.31, a slight increase from $1.29 in the same period last year. Revenue projections hover around $1.16 billion, a modest rise from the $1.14 billion recorded a year prior. While these figures represent continued growth, they also suggest a potential slowing of the explosive growth seen earlier in the pandemic.
Zoom’s last earnings report, released on August 21st, showcased an impressive beat of analyst expectations. The company reported EPS of $1.39, exceeding the consensus estimate of $1.21 by a considerable 14.88%. Revenue also surpassed expectations at $1.16 billion, marking a 2.09% year-over-year increase. This positive performance sent Zoom’s stock price up 5.8% to close at $85.88 on Friday. This positive momentum, however, is unlikely to continue if the company fails to meet market expectations in Q3.
But what are the experts saying? The analyst community’s views on ZM stock are varied, ranging from bullish “Buy” recommendations to more cautious “Hold” and “Equal-Weight” ratings. Here’s a snapshot of some key analyst opinions:
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Rosenblatt Securities (Catharine Trebnick):
Maintained a Buy rating with a price target of $78 (Accuracy rate: 73%).*
Morgan Stanley (Meta Marshall):
Maintained an Equal-Weight rating, raising the price target from $68 to $86 (Accuracy rate: 73%).*
Wedbush Securities (Daniel Ives):
Upgraded the stock from Neutral to Outperform, increasing the price target from $80 to $85 (Accuracy rate: 79%).*
Deutsche Bank (Matthew Niknam):
Maintained a Hold rating, raising the price target from $71 to $75 (Accuracy rate: 64%).*
Baird (William Power):
Maintained an Outperform rating, but lowered the price target from $84 to $77 (Accuracy rate: 85%).The divergence in analyst opinions highlights the uncertainty surrounding Zoom’s future. While some analysts see significant growth potential, others are more cautious, pointing to the challenges of maintaining growth in a post-pandemic world. The upcoming earnings release will undoubtedly play a crucial role in shaping the market’s perception of ZM and its long-term trajectory. Investors will be keenly watching the call for any indication of future growth prospects and strategic initiatives. The wide range in price targets, from $68 to $86, underlines the considerable uncertainty surrounding the stock’s near-term performance.
The upcoming earnings release is a pivotal moment for Zoom. The company’s ability to meet or exceed expectations will be crucial in determining the stock’s short-term direction. Investors are encouraged to do their due diligence and consider the diverse range of analyst opinions before making any investment decisions.
