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Will Zoom manage to top market estimates?

August 22,2022 15:58:53

With analysts expecting lower earnings, Zoom Video Communications, Inc. is set to announce its financial results for the latest quarter on Monday, August 22, 2022.

How has Zoom’s journey been so far?

Zoom Communications was launched in 2011 and was already known as a great video conferring tool for business. However, Covid related lockdowns and work from home orders accelerated its success and proved to be the biggest growth driver for the company.

But the company’s stock has been on a downward trend this year, since the easing of pandemic restrictions and work from home trends. The stock has dipped around 40% since the start of the year, while the Nasdaq 100 index lost just about 18% in the same period.

So, what are the expectations now?

During the company’s last earnings presentation, Zoom said its revenue rose 12% year-over-year to $1.074 billion in the first quarter. Analysts are expecting the company’s revenue to rise by a lower rate of 9.3% Y-o-Y to $1.12 billion in the second quarter. Zoom’s quarterly earnings are expected to decline sharply to $0.45 per share, from the $1.03 per share reported for the previous quarter.

Analysts at Bernstein, with a price target of $122 on Zoom, recently described the company as a “COVID tailwind poster child.” Bernstein’s analysts noted that the company’s growth in sales slowed while operating costs increased twice as fast as revenue, following the easing of the pandemic restrictions.

The markets will also focus on the company’s customer numbers, with Zoom reporting around 198,900 enterprise customers at the end of the first quarter.

How to trade Zoom’s earnings reports?

Traders can use indices to trade Zoom’s earnings report even if they don’t own the shares. Are you trading indices to gain exposure to the top companies in the world?

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