It has been about a month since the last earnings report for Zoom Communications (ZM) . Shares have added about 2.7% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Zoom due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Zoom Q3 Earnings Beat, Enterprise Customers Dr ...

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Zoom Communications (ZM) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Over the past month, shares of this video-conferencing company have returned +8.8%, compared to the Zacks S&P 500 composite's +3.2% change. During this period, the Zacks Internet - Software industry, which Zoom falls in, has gained 8.8%. The key question now is: What could be the stock's future direction?Wh ...

Core Viewpoint - Zoom Video Communications has transitioned from post-pandemic normalization to sustainable growth, maintaining a low single-digit quarterly growth rate for nearly three years, with expectations to continue this pace into 2025 and beyond [3][5]. Financial Performance - The company reported a revenue growth of 3.6% for the quarter, amounting to $1.17 billion, which exceeded consensus estimates by nearly 100 basis points [5][6]. - Enterprise revenue, a key segment, increased by 5.8%, driven by a 7% rise in large business and a record low churn rate, indicating high customer satisfaction [5]. - Adjusted operating margin was strong at 38.9%, with adjusted EPS of $1.38, reflecting a 700 basis point year-over-year increase and 500 basis points above consensus [6]. Analyst Sentiment - Analysts have shown improved sentiment, with 13 revisions reversing a downward trend since 2022, including two above-consensus targets and 11 price target increases, suggesting a potential upside of 5% to 25% from current levels [4][6]. - The company has increased its guidance for revenue and earnings, indicating positive momentum and new client acquisitions [6]. Balance Sheet Strength - Zoom maintains a strong balance sheet with an 8% increase in shareholder equity and low leverage, with total liabilities at less than 0.25 times equity [7]. - The company’s free cash flow supports its robust financial condition while allowing for future investments [7]. Market Dynamics - Institutional ownership stands at approximately 65%, which may present a headwind for stock price gains, particularly as institutional activity has been net-bearish in Q4 2024 [8]. - The stock faces resistance near the $95 level, with critical support established at $83, indicating potential sideways movement in the near term [9].

Core Insights - The performance of Zoom Video Communications' international operations is critical for understanding its financial resilience and growth potential [1][2] - The company's total revenue for the quarter reached $1.18 billion, reflecting a year-over-year increase of 3.6% [4] International Revenue Breakdown - APAC contributed $144 million, accounting for 12.23% of total revenue, with a surprise of +0.39% compared to the consensus estimate [5] - EMEA generated $187 million, representing 15.88% of total revenue, with a surprise of +0.77% against analyst expectations [6] Future Revenue Projections - Analysts project total revenue for the current fiscal quarter to be $1.18 billion, a 2.7% increase from the same quarter last year, with APAC and EMEA expected to contribute 12.3% ($144.36 million) and 15.9% ($187.68 million) respectively [7] - For the entire year, total revenue is forecasted at $4.65 billion, an improvement of 2.8% from the previous year, with APAC and EMEA expected to contribute $567.97 million (12.2%) and $741.74 million (15.9%) respectively [8] Market Dynamics - The reliance on global markets presents both opportunities and challenges for Zoom Video, making the analysis of international revenue trends essential for forecasting future performance [9] - Wall Street analysts closely monitor these trends, especially for companies with significant international operations, to adjust earnings forecasts accordingly [10] Stock Performance - Zoom Video's stock has increased by 9.4% over the past month, outperforming the S&P 500's 3.5% increase, and has seen a 23.1% rise over the past three months compared to the S&P 500's 8.2% increase [13]

Core Viewpoint - Zoom Communications has experienced a decline from its peak stock price of over $550 in 2020, with slower revenue growth following the pandemic surge in demand [1][2] Financial Performance - For fiscal Q3 2025, Zoom reported a revenue increase of nearly 4% year over year to $1.18 billion, surpassing analyst expectations of $1.16 billion [3] - Adjusted earnings per share (EPS) rose by 7% to $1.38, exceeding the consensus estimate of $1.31 [3] - Enterprise revenue grew nearly 6% year over year to $698.9 million, with a 7% increase in customers generating over $100,000 in annual revenue [4] - Online revenue remained flat at $478.7 million, with an all-time low churn rate of 2.7% [4] Customer Dynamics - Net dollar retention among enterprise customers was reported at 98%, indicating some customer churn or reduced spending [5] - The company is focusing on enhancing its offerings with new AI features, including the AI-first Work Platform and Zoom AI Companion 2.0 [6][7] Strategic Initiatives - Upcoming AI solutions will target specific industries such as healthcare and education, along with a new platform for frontline workers [7] - The collaboration platform Workvivo saw a 72% increase in customers, and Zoom signed its largest contact center deal for 20,000 seats, with an 82% growth in customer count [8] Cash Flow and Valuation - Zoom generated operating cash flow of $483.2 million and free cash flow of $457.7 million, ending the period with $7.7 billion in cash and marketable securities and no debt [9] - The company raised its fiscal 2025 revenue guidance to between $4.656 billion and $4.661 billion, with adjusted EPS expectations of $5.41 to $5.43 [10] Market Position - Zoom's forward price-to-earnings (P/E) ratio is 15.5, and its price-to-sales (P/S) ratio is just over 5, but with 30% of its market cap in cash, these metrics may be overstated [11] - Excluding net cash, the P/E ratio would be under 11, and the enterprise value-to-revenue ratio would be about 3.6 [11] Growth Potential - The company is positioned as a cash-producing entity, but tech investors typically seek growth opportunities [13] - If Zoom's new AI initiatives can drive growth in the coming year, there may be significant upside potential for the stock [13]

Acceleraate Wins Zoom's 2024 EMEA Zoom Contact Center Partner of the YearAward Recognises Acceleraate's Excellence in PartnershipNovember 29, 2024 10:20 AM EST | Source: xpandly LimitedManchester, United Kingdom--(Newsfile Corp. - November 29, 2024) - CX Technology Specialist, Acceleraate, announced today that it has been named EMEA Zoom Contact Center Partner of the Year 2024 by Zoom Video Communications, Inc., commending the company's impactful achievements and innovation.Matt Cowell, CRO Ac ...

Core Viewpoint - Zoom Communications has experienced significant growth in its stock price and has reported strong quarterly results, leading to an optimistic outlook for future performance [1][2][3]. Financial Performance - Zoom reported fiscal Q3 revenue of $1.18 billion, a 3.6% increase year-over-year, with adjusted earnings rising nearly 7% to $1.38 per share, surpassing Wall Street expectations [4]. - The company raised its full-year revenue guidance to approximately $4.66 billion, up from a previous forecast of $4.65 billion, and adjusted earnings expectations increased to $5.42 per share from a prior range of $5.29 to $5.32 per share [5]. Customer Growth and Market Expansion - Zoom's customer spending has improved, with a notable 82% year-over-year increase in contact center customers, reaching 1,250 [6]. - The contact center market is projected to grow at an annual rate of nearly 27% through 2029, potentially reaching $86 billion [7]. - The adoption of Zoom's AI Companion platform has also surged, with a 59% quarter-over-quarter increase in monthly active users [8]. Market Trends - The intelligent virtual assistant market is expected to grow at an annual rate of 24% through 2030, reaching over $14 billion [9]. - The number of customers spending over $100,000 annually on Zoom products increased by 7% last quarter, indicating strong demand [10]. Customer Retention and Future Growth - Zoom's churn rate improved to a monthly average of 2.7%, down from 3% a year ago, marking the lowest churn rate reported [11]. - Remaining performance obligations (RPO) increased by 5% year-over-year to $3.74 billion, suggesting potential future revenue growth [11]. Valuation and Investment Potential - Despite a recent stock price dip, Zoom's valuation remains attractive, trading at 29 times trailing earnings compared to the Nasdaq-100 index's 33 times [12]. - The forward earnings multiple of 16 indicates healthy growth potential, making it a potentially smart long-term investment [13].

Core Viewpoint - Zoom Video has demonstrated strong performance in Q3, exceeding earnings expectations and providing favorable revenue guidance, making it a stock to watch in the tech sector [1][2]. Group 1: Q3 Results - Zoom reported Q3 EPS of $1.38, surpassing Zacks estimates of $1.31 and increasing 7% from $1.29 per share a year ago [2]. - Revenue for Q3 was $1.17 billion, a 3% year-over-year increase, slightly above expectations of $1.16 billion [2]. - The company has consistently exceeded Zacks EPS Consensus since going public in 2019, with an average EPS surprise of 14.29% over the last four quarters [3]. Group 2: Guidance and Future Outlook - Zoom's Q4 revenue guidance is slightly above expectations, with a record over 20,000-seat deal in EMEA for its Contact Center [5]. - The full-year revenue guidance for fiscal 2025 is projected at $4.65-$4.66 billion, exceeding the current Zacks Consensus of $4.64 billion, indicating a 2% growth [5]. Group 3: Stock Performance and Valuation - Year-to-date, Zoom's stock has increased by 19%, although it lags behind the broader indexes and the Zacks Internet-Software Market's 33% growth [8]. - The stock trades at a forward earnings multiple of 15.6X, significantly lower than the S&P 500's 25.4X and the industry average of 32.6X [9]. - Zoom's attractive P/E valuation and consistent performance are expected to lead to upward revisions in earnings estimates [11].

Core Viewpoint - Zoom Communications has demonstrated strong financial performance in Q3 fiscal 2025, exceeding earnings and revenue estimates, indicating a potential buying opportunity for investors [1] Financial Performance - Adjusted earnings were reported at $1.38 per share, surpassing the Zacks Consensus Estimate by 5.34% and showing a 7% year-over-year growth [1] - Revenues reached $1.178 billion, exceeding expectations by 1.23% and reflecting a 3.6% year-over-year increase [1] - The company has consistently outperformed earnings estimates over the past four quarters, with an average surprise of 17.81% [1] Stock Performance - Zoom's stock price has surged 34.4% over the past six months, significantly outperforming the broader Zacks Computer and Technology sector, which grew by 8.1% [2] Product Diversification - The company is diversifying its product offerings beyond video conferencing, expanding into contact centers, phone systems, and AI-powered meeting assistants, which is resonating with enterprise customers [2] AI-Driven Innovation - The transition to an AI-first work platform is progressing well, with AI Companion Monthly Active Users increasing by 59% quarter over quarter [5] - The introduction of AI Companion 2.0 includes features like Meeting Summary, Meeting Query, and Smart Compose, with plans for industry-specific add-ons in early 2024 [5] Enterprise Growth - The enterprise segment has shown strong performance, with revenues growing 6% year over year, now representing 59% of total revenues [6] - Nearly 4,000 high-value customers contribute over $100,000 in the trailing 12 months, accounting for 31% of total revenues [6] - The company achieved its lowest monthly churn rate of 2.7%, indicating strong customer retention [6] Expanding Product Portfolio - The Contact Center segment has secured its largest customer deal of over 20,000 seats, and the total number of Contact Center customers has surpassed 1,250, reflecting an 82% year-over-year growth [8] - Workvivo has been named Meta Platform's only preferred migration partner as it retires Workplace from Meta [8] Financial Strength - Zoom maintains a robust financial position with approximately $7.7 billion in cash and marketable securities [9] - The board has authorized an additional $1.2 billion share repurchase program, increasing the total unexecuted buyback to approximately $2 billion [9] Future Outlook - The company has raised its guidance for fiscal 2025, projecting revenues between $4.656 billion and $4.661 billion, indicating approximately 2.9% year-over-year growth [14] - Expected operating margin is projected at 39%, showcasing a balance between growth and profitability [14] Investment Case - Zoom presents a compelling opportunity for investors in the workplace technology sector, supported by strong financial performance, a growing enterprise customer base, and a commitment to innovation [20]