After Tuesday trading was closed, the shares of Zoom surged about 2%. The jump in after-trade hours came after the company announced its first-quarter results. Due to the long period of lockdown in different parts of the world, the video conference call software became extremely popular. This brought Zoom first-quarter earnings that beat the predictions of analysts.
The company reported earnings of 20 cents per share, which exceeded the investors’ predictions of 9 cents per share. This is also a great rise from the results of the previous year when the company earnings were $0 per share. Zoom’s first-quarter revenue amounted to $328.2 million, which represents a 169% increase. Meanwhile, the estimates for the company’s first-quarter revenue were $202.32 million.
After numerous companies and schools were forced to resort to video conference calls during the lockdown period, the number of Zoom users with over 10 employees increased by 354%. What is more, the customers who contributed over $100 towards the company’s revenue were significantly more during the first quarter of this year.
The company reported that due to the COVID-19 crisis, the demand for face-to-face video calls significantly increased and this led to a jump in Zoom’s first-quarter earnings. The predictions for Zoom’s second-quarter profit range between $0.44 and $0.46 a share. Meanwhile, the second-quarter revenue is expected to be around $495.0 million and $500 million. The earnings estimates for the entire fiscal year are between $1.21 and $1.29 a share. As for Zoom’s revenue for 2020, the predictions range between $1.775 billion and $1.800 billion.
Analyst stock price forecast and recommendation
According to CNN Money, 22 analysts who offer 12-month price forecasts for Zoom Video Communications Inc. have a median target of $137.50, with a high estimate of $200.00 and a low estimate of $55.00. The median estimate represents a -34.09% decrease from the last price of $208.62.
The same media also provides the recommendations of 30 investment analysts who participated in a survey on the Zoom Video Communications Inc. stock. The consensus rating for the company’s stock is “Hold”, with 15 analysts ranking it as “Hold”, 7 as “Buy”, 5 as “Sell” and 3 – as ‘Outperform”.