Zoom enables users to virtually interact with contacts when a physical meeting is not possible, such as if you work remotely. Zoom is more than a video chat software, as it allows users to record meetings, share one another’s screens and create annotations. This flexibility results in the ability to collaborate efficiently on projects for work or education. Technical trading involves using indicators such as Bollinger bands and moving averages to identify points of support, resistance, and trends in the price of the selected stock.

  • The company has shown remarkable success in the upmarket segment, with nearly 4,000 customers contributing over $100,000 in trailing twelve-month revenues, marking a 7% year-over-year increase.
  • These customers accounted for 31% of revenues, up from 29% in the year-ago quarter.
  • Whether or not you should invest in Zoom stock is ultimately a personal decision, but there are some factors you should weigh when deciding whether or not the company makes sense for your portfolio.
  • At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors.
  • If you still want to trade Zoom after doing a comprehensive analysis, it is important to think of how Zoom stock will slot in your portfolio.

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However, ZM has been facing significant competition from Cisco, Microsoft and Google Meet. This might have led to a loss in small and medium-sized business customers, which is likely to have hurt top-line growth.International expansion has been causing cost escalations in the form of development expenses. This trend is likely to have continued in the to-be-reported quarter as the company plans to add local sales support in international markets.

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Online average monthly churn was just 2.9%, and the percentage of online monthly recurring revenue from online customers with an ongoing term of service lasting at least 16 months was up from one year ago. This means that fewer customers are discontinuing their Zoom subscriptions, which are still the primary source of revenue for the business, while more customers are maintaining contracts with the company for prolonged durations. Once your brokerage account is up and running, you’ll want to decide your budget for investing in Zoom stock.

Stock Forecasts and Research Tools

The consensus earnings estimate of $5.36 for the current fiscal year indicates a year-over-year change of -3.3%. No investment decision can be efficient without considering a stock’s valuation. Whether a stock’s current price rightly reflects the intrinsic value of the underlying business and the company’s growth prospects is an essential determinant of its future price performance.

Besides the spike of users from coronavirus, many companies are becoming more remote. This ‘remote working revolution’ will require effective video conferencing software, such as Zoom to contribute to the revolution. This is why it was easy for it to win more brands and individual users when COVID-19 broke out and forced more people to work remotely. After a steady rise from April 2020, Zoom stock retracted by about 8% in October, and analysts are predicting that the price might go down further. Yes, Zoom Video Communication (ZM) shares soared during the coronavirus pandemic, but what about the post-pandemic period?

  • Looking at the first half of the company’s fiscal 2025, the company reported revenue of $2.3 billion, a 2.6% increase from the same time frame one year ago.
  • The Zacks Consensus Estimate for customers contributing more than $100,000 in revenues is currently pegged at 4,042 for the third quarter fiscal 2025.
  • Zoom Video Communications (ZM Quick QuoteZM – Free Report) is slated to release its third-quarter fiscal 2025 results on Nov. 25.Zoom expects third-quarter fiscal 2025 revenues between $1.162 billion and $1.165 billion.

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Shares of Zoom have surged 41.6% in the past six months compared with the broader Zacks Computer and Technology sector’s growth of 6.5%. The recent uptick in Zoom’s stock price can be attributed to several factors, raising questions among investors about whether now is the time to buy the stock. Multiple analysts have weighed in on Zoom shares in recent weeks leading up to earnings.

Zoom announced their stock would be priced at anywhere between $32.00 and $35.00. Once the stock was publicly available, the price quickly surged over 80% to $65, before ending its first day of trading at around $62. To succeed in Zoom trading, it is prudent to follow its performance and the latest analysis by experts closely.

The company’s third-quarter fiscal 2025 performance underscores this transformation, with revenues reaching $1.178 billion, beating expectations and growing 3.6% year over year. The successful launch of AI Companion 2.0 demonstrates Zoom’s commitment to innovation, with AI Companion Monthly Active Users growing an impressive 59% quarter over quarter and over 4 million accounts already enabled. Zoom reported revenues of $1.18 billion in the last reported quarter, representing a year-over-year change of +3.3%.

Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Zoom is rated Zacks Rank #2 (Buy). Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, activ trades review Zoom Video is rated Zacks Rank #1 (Strong Buy). Other institutional investors also recently added to or reduced their stakes in the company. FMR LLC raised its stake in shares of Zoom Video Communications by 23.8% in the third quarter.

Rosenblatt analyst Catharine Trebnick maintained Zoom with a Buy rating and price target of $78. Morgan Stanley analyst Meta Marshall maintained an Equal-Weight rating and raised the price target from $68 to $86. According to the research reports of 24 Wall Street equities research analysts, the average twelve-month stock price forecast for Zoom Video Communications is $89.33, with a high forecast of $115.00 and a low forecast of $75.00. In the case of Zoom, the consensus sales estimate of $1.17 billion for the current quarter points to a year-over-year change of +2.1%. The $4.79 billion and $4.94 billion estimates for the current and next fiscal years indicate changes of +2.6% and +3.2%, respectively. While earnings growth is arguably the most superior indicator of a company’s financial health, nothing happens as such if a business isn’t able to grow its revenues.

By the end of Zoom’s first month in business, it already had close to half a million users; a few months later, that figure was up to 1 million users. By September 2013, Zoom raised a Series B round of funding to the tune of $6.5 million and had 3 million daily participants using its meeting software. Many analysts predict that Zoom could grow its annual revenue to around the £1bn mark by automated forex trading 2022, a significant increase from the £662m in 2019.

How to trade Zoom

Zoom Video shares have gained nearly 24% since the company last reported earnings. Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company’s earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings. Even though a company’s earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It’s almost impossible for a company to grow its earnings without growing its revenue for long periods.

Because of the anticipated high volatility, make sure to manage your risk well by only trading with a small portion of your equity in every trade and using stop-loss orders correctly. Since no trading strategy is perfect, you should always use an appropriate risk management strategy, such as a stop-loss order. This will help to minimize losses if the market goes against your prediction.

ZM stock trades relatively undervalued at just 14.7 times forward earnings. Our proprietary Zacks ESP indicator is not conclusively predicting another earnings beat. Keep in mind that stocks can be volatile in the aftermath of earnings announcements.

Here at Zacks, we prioritize appraising the change in the projection of a company’s future earnings over anything else. That’s because we believe the present value of its future stream of earnings is what determines the fair value for its stock. Deciding which brokerage account you want to use is a decision that should revolve around your investing priorities, goals, and interests. Most brokerage firms will let you invest in a wide range of asset classes, including individual stocks, bonds, mutual funds, and more.

ZM’s increasing range of solutions is expected to have contributed to customer growth. ZM’s launch of Zoom Docs is expected to have driven customer momentum by expanding offerings across the productivity lifecycle and enabling the transformation of information from a Zoom Meeting into tasks and documents. The company’s advancements and partnerships related to artificial intelligence (AI) in the fiscal third quarter are noteworthy. ZM announced enhancements of its AI features within the Zoom Workplace, aiming to Forex trading bot boost team productivity and collaboration. Zoom’s AI Companion is expected to have driven active user growth due to its capability to enhance productivity and capability by leveraging generative AI. At the end of the second quarter of fiscal 2025, Zoom AI Companion had a reach of 1.2 million accounts.

Wondering what the next stocks will be that hit it big, with solid fundamentals? Enter your email address to see which stocks MarketBeat analysts could become the next blockbuster growth stocks. As long as you’re not expecting pandemic-era returns, and want to invest in Zoom stock for its more mature business potential, there’s a lot for investors to like about this stock.