Zoom Video Communications Earnings: ZM stock rallies 19% after raising guidance

Zoom Video reported terrific earnings after the close on Monday.
ZM stock has been down as much as 85% from its all-time high.
Analysts expected 87 cents a share on $1.07 billion.

Zoom (ZM) stock exploded 19% afterhours on Monday after the video conferencing company delivered results for the quarter ending April 30 that impressed the market. Zoom delivered adjusted earnings per share (EPS) of $1.03, which beat consensus by about 18%. Revenue came in right in line at $1.07 billion. Shares jumped from a closing price of $89.33 to above $106.

The market expected a fall in YoY profitability, which it got but at a lower reduction than expected. In the quarter a year ago, Zoom reported adjusted EPS of $1.32. Wall Street consensus had ZM pegged for the quarter at $0.87 a share though. This implied EPS dropping by 33% YoY and revenue climbing 12% over that timeline. Before the earnings release Citi and Piper Sandler both put a neutral outlook on ZM shares. Benchmark on the other hand believed that shares had already been beaten down and were in line for a rally if the quarter is a success. It looks like Benchmark takes the cake.

Management offered fiscal Q2 guidance, the quarter, that was also better than analysts had been expecting. They put FQ2 EPS between 90 and 92 cents and revenue at $1.12 billion. For the full year, Zoom raised its EPS expectation by about 20 cents to between $3.70 and $3.77. It still sees revenue coming in at $4.54 billion.

The jump afterhours pushed Zoom stock the whole way above the 50-day moving average, at least briefly. Currently, it sits at $105.24. The 50-day moving average will be the target on Tuesday. The post-session rally also had Zoom stock trading above the top line of its descending price channel. Closing above there on Tuesday would signal a turnaround is truly in the works.

Zoom daily chart

Like this article? Help us with some feedback by answering this survey:

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.