Zoom Video Communications, Inc. ($ZM) Earnings (Q2 FY23)

 Zoom Video Communications, Inc. ($ZM) Earnings and Opinion:


Zoom Video Communications is a company in the Technology sector and operates in the Software-Application industry. The company provides unified communications platforms in locations all over the world. Zoom Video Communications was incorporated in 2011 and is currently headquartered in San Jose, California. The company made its debut on the stock market in April of 2019.

Zoom Video Communications Earnings Results:

  • Revenues of $1.1B missing expectations of $1.12B
  • Operating Income of $394M beating expectations of $365M
  • Adjusted EPS of $1.05 beating expectations of $0.92
  • Cash From Operations of $257M missing expectations of $355M
  • Guidance missed consensus estimated on all of the metrics
Opinion:
Zoom Video Communications is moving lower after reporting earnings after the closing bell today. The company had a decent earnings report, but guidance disappointed investors causing the stock to fall. The claim to a falling outlook was credited to performance of online business and sales timing. Revenues came in at about even with expectations and Operating Income beat expectations. EPS was also a hot commodity as it came in way over expectations and is a good sign for the long-term. As far as valuation goes, P/E ratio sits at 23.06 which is lower than the industry average of over 29. The P/S ratio is at 6.90 which is also lower than the industry average of 7.94. I see this stock currently as undervalued, based on these two valuation metrics alone. The revenue growth seems to slow down a bit, but current ratio sits above 3 and the cash majorly outweighs the debt, so they have a lot to work with. In my opinion, Zoom has a lot of potential, but it needs to find ways to beat out competition like Microsoft Teams. If they are able to achieve something like this, then the upside potential is high. However, currently they seem to be struggling as the CFO pointed out, some little things are holding them back. I like Zoom, I think it comes with a risk, but its a good-long term play. I am long Zoom.

*Information from Yahoo Finance, CMLVIZ, Consensus Gurus, and CSI Market

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