Zoom Video Communications (ZM) has reported strong quarterly financial results and raised its forward guidance, sending its shares up 5% in after-hours trading.
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The teleconferencing company announced earnings per share (EPS) of $1.53, topping analysts’ consensus forecast of $1.37. Revenue in what was the year’s second quarter totaled $1.22 billion, which beat Wall Street expectations of $1.20 billion.
In terms of guidance, Zoom said that it now expects Fiscal 2026 revenue of $4.83 billion to $4.84 billion, above earlier projections of $4.80 billion to $4.81 billion. Management also forecast a per-share profit of $5.81 to $5.84, compared with a previous outlook of $5.56 to $5.59.
Zoom’s earnings per share. Source: Main Street Data
AI Integration
Management also said that the integration of artificial intelligence (AI) across its product lines and the broadening of its service portfolio have helped Zoom grow its core video-conferencing business, while enabling it to enter and scale in new markets.
The company launched its Virtual Agent 2.0, which can autonomously complete complex tasks such as processing returns, updating accounts or booking appointments using AI. Zoom has also launched a slew of AI capabilities, including a Custom AI Companion that enables small business owners to leverage the technology across third-party video platforms, including Google (GOOGL) Meet.
Zoom has experienced a slowdown since the end of the Covid-19 pandemic, when the company saw rapid growth in users and subscribers as organizations turned to online video-conferencing.
Is ZM Stock a Buy?
The stock of Zoom Video Communications has a consensus Moderate Buy rating among 21 Wall Street analysts. That rating is based on nine Buy, 11 Hold, and one Sell recommendations issued in the last three months. The average ZM price target of $91.26 implies 25.28% upside from current levels. These ratings are likely to change after the company’s financial results.
