Zoom Video Communications the company that provides video communication tools, and it is about to release its third quarter earnings report. Analysts predict that the company will make $1.08 per share and increase its revenue to $1.12 billion. With more people going back to their offices, Zoom has been working on new tools that use artificial intelligence to compete with its rivals. In the future, the company plans to enter the Contact Center and Docs markets, where it will face competition from Microsoft Office and Google Docs.
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- These revisions help to show the ever-changing nature of near-term business trends.
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- “As a result of the pandemic, we are in a period of great public adoption and feature velocity in videoconferencing,” he said.
- Zoom enables users to virtually interact with contacts when a physical meeting is not possible, such as if you work remotely.
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. 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 Stock: Strong Balance Sheet
Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Zoom Video Communications (ZM Quick QuoteZM – Free Report) closed the most recent trading day at $61.32, moving -1.29% from the previous trading session. The stock’s performance was behind the S&P 500’s daily loss of 0.6%. At the same time, the Dow lost 0.17%, and the tech-heavy Nasdaq lost 0.92%. 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.
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Has Zoom (ZM) ever split its stock?
As the coronavirus crisis eases, retaining small businesses as well as corporate accounts will be one key to Zoom’s success. For customers with one to 10 employees, renewals are expected to slow as the economy reopens and shelter-in-place orders lift. Sales growth slowed for the ninth-straight quarter as the company adjusts to https://forexhero.info/ slower product demand in the post-coronavirus emergency era. Analysts have debated when decelerating sales will hit a bottom. At its annual Zoomtopia user conference in early October, the company said it will not charge customers for use of its AI Companion. Its capabilities include meeting/chat summaries and smart recordings.
We do this to reflect that growth tends to slow more in the early years than it does in later years. Zoom is currently trading at an overvalued rate, with its 12-month-trailing P/E ratio approximately 444x times its EPS. However, if the company keeps building upon its financial results and gains market share in the video conferencing industry, it could result in a promising future for the relatively new company. 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 the creation of our proven Zacks Rank stock-rating system.
Growth in annual recurring revenue for business customers with contracts topping $100,000 is one metric to monitor. Rather than increase revenue, Zoom Video expects gen AI tools to retain and add customers. Zoom is available free of charge to anyone and the basic free version offers all the facilities codeready workspaces most people will need. I’m Ben, I graduated with a degree in Engineering and Science from the University of Adelaide, Australia. I’ve been actively trading the Futures and Forex markets since 2014. Do the same with the other axis until you’ve zoomed the chart to the desired size.
Zoom Video Communications, Inc. provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. 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. Zoom shares have lost over 60% of their value in the past six months as part of a broader tech sell-off in response to rising interest rates and inflation.
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Earlier in September, The Wall Street Journal reported that a U.S. Department of Justice-led panel, named Team Telecom, was investigating the proposed merger’s potential national security risks. It was founded in 2011 by Eric Yuan, a former Cisco executive. Cisco offered the WebEx web conferencing platform, which remains a competitor in the conferencing space today. Yuan’s competitor, Zoom, evolved quickly; the service launched in 2013 and had a million users by the end of the year.
Is Zoom Video A Buy Amid Artificial Intelligence Software Race?
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Zoom Video Communications Insider Activity
Revenue and earnings growth remain strong — analysts are forecasting revenue and earnings per share to grow by 54% and 46% year over year up to $4.1 billion and $4.87 per share in fiscal year 2022, respectively. Zoom has almost no debt, boasting a debt-to-equity ratio of 2% and a strong cash position of $1.3 billion. The company also grew free cash flow by over 1,100% in fiscal year 2021 up to $1.4 billion. The significant climb in free cash flow was a result of superb revenue growth stemming from pandemic-driven demand. Zoom’s upcoming earnings report will give us a better idea of how the company is doing financially and how it has been affected by the post-pandemic environment.
Investors should also note that ZM has a PEG ratio of 0.4 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. As the market closed yesterday, the Internet – Software industry was having an average PEG ratio of 1.85. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second ‘steady growth’ period.
Amid Covid-19 emergency, demand for Zoom videoconferencing software surged as businesses told employees to work from home. Zoom Video reported third quarter earnings that topped estimates but offered mixed guidance for the current period. In fact, if someone else sets up the Zoom Meeting and invites you, all you need to do is follow the instructions in the email invitation to start using Zoom. You’ll need to click a link to install the Zoom app, and then enter the conference code to sign into the meeting to which you’ve been invited. Kurtzman believes that, with most security concerns addressed, Zoom can now refocus on improving the video call experience for users. He pointed to the company’s recent addition of AR features, as an example.
Like Zoom, its popularity has grown significantly in recent months; the company in April said the platform has more than 75 million daily active users. And Microsoft has worked to improve its platform and address issues users flagged at the start of the pandemic. One change now allows users to see up to 49 people on a Teams video call; another creates virtual viewing modes that mimic in-person gatherings.