Zoom Video Communications (ZM) has reported better-than-expected first quarter financial results and issued bullish forward guidance, sending its stock up 3% in after-hours trading.
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The video conferencing company announced earnings per share (EPS) of $1.43, beating Wall Street forecasts of $1.31. Revenue for the first three months pf the year totaled $1.17 billion, which was inline with the consensus expectation of analysts. Sales were up 2.9% year-over-year.
“We delivered another solid quarter, exceeding guidance in both revenue and profitability — a testament to the strength of our platform and AI-first innovation,” said Zoom Communications founder and CEO Eric Yuan in the company’s earnings statement.
Zoom Communications’ net income. Source: Main Street Data
Bullish Outlook
In terms of forward guidance, Zoom issued an outlook for the current quarter and full year that exceeded Wall Street projections. The company forecasts second quarter earnings of $1.36 to $1.37 on revenue of $1.195 billion to $1.20 billion. That’s above analysts’ consensus estimates of $1.34 EPS and $1.192 billion in sales.
For the entire Fiscal year, Zoom expects earnings of $5.56 to $5.59 on revenue of $4.80 billion to $4.81 billion, which is above the consensus forecast of $5.37 in earnings and $4.788 billion in revenue. For the year’s first quarter, Zoom reported having 4,192 customers contributing over $100,000 in trailing 12-month revenue, up 8% from the a year earlier. ZM stock has risen 0.81% this year.
Is ZM Stock a Buy?
The stock of Zoom Communications has a consensus Moderate Buy rating among 26 Wall Street analysts. That rating is based on 10 Buy, 15 Hold, and one Sell recommendations issued in the last three months. The average ZM price target of $87.48 implies 6.33% upside from current levels. These ratings are likely to change after the company’s financial results.
