• 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


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