Zoom Communications (ZM) Increases Despite Market Slip: Here's What You Need to Know

Zoom Communications (ZM) ended the recent trading session at $79.32, demonstrating a +1.55% change from the preceding day's closing price. The stock's change was more than the S&P 500's daily loss of 1.74%. Elsewhere, the Dow lost 1.01%, while the tech-heavy Nasdaq lost 2.38%.

The video-conferencing company's shares have seen a decrease of 8.57% over the last month, not keeping up with the Computer and Technology sector's loss of 5.77% and the S&P 500's loss of 4.99%.

Analysts and investors alike will be keeping a close eye on the performance of Zoom Communications in its upcoming earnings disclosure. On that day, Zoom Communications is projected to report earnings of $1.41 per share, which would represent a year-over-year decline of 1.4%. Meanwhile, our latest consensus estimate is calling for revenue of $1.22 billion, up 4.16% from the prior-year quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $5.87 per share and a revenue of $5.06 billion, indicating changes of -0.84% and +3.92%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for Zoom Communications. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.28% higher. Currently, Zoom Communications is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Zoom Communications is currently trading at a Forward P/E ratio of 13.31. This expresses a discount compared to the average Forward P/E of 18.93 of its industry.

Meanwhile, ZM's PEG ratio is currently 3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.04.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 157, finds itself in the bottom 36% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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This article originally published on Zacks Investment Research (zacks.com).

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