Zoom Communications (ZM) ended the recent trading session at $87.40, demonstrating a +2.01% change from the preceding day's closing price. The stock's change was more than the S&P 500's daily loss of 0.28%. Meanwhile, the Dow experienced a drop of 1.09%, and the technology-dominated Nasdaq saw an increase of 0.2%.
The video-conferencing company's stock has dropped by 11.52% in the past month, falling short of the Computer and Technology sector's loss of 1.22% and the S&P 500's gain of 1.64%.
Analysts and investors alike will be keeping a close eye on the performance of Zoom Communications in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $1.49, marking a 2.61% fall compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.27 billion, up 4.22% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $6.06 per share and a revenue of $5.09 billion, representing changes of +2.36% and +4.54%, respectively, from the prior year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Zoom Communications. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. Zoom Communications is currently a Zacks Rank #3 (Hold).
In the context of valuation, Zoom Communications is at present trading with a Forward P/E ratio of 14.14. For comparison, its industry has an average Forward P/E of 19.93, which means Zoom Communications is trading at a discount to the group.
We can also see that ZM currently has a PEG ratio of 3.19. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.1.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 95, putting it in the top 39% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Zoom Communications, Inc. (ZM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).