Analysts Estimate Zoom Communications (ZM) to Report a Decline in Earnings: What to Look Out for

Core Viewpoint - Zoom Communications (ZM) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending April 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for May 21, 2025, with expectations that better-than-expected key numbers could lead to a stock price increase, while missing estimates may result in a decline [2]. - The consensus estimate for quarterly earnings is projected at $1.30 per share, reflecting a year-over-year decrease of 3.7%, while revenues are expected to reach $1.16 billion, marking a 2% increase from the previous year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised downwards by 0.41%, indicating a collective reassessment by analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Zoom is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.68%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with a strong predictive power for positive readings [7][8]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically shown a nearly 70% chance of delivering a positive surprise [8]. Historical Performance - In the last reported quarter, Zoom exceeded the expected earnings of $1.31 per share by delivering $1.41, resulting in a surprise of +7.63% [12]. - Over the past four quarters, Zoom has consistently beaten consensus EPS estimates [13]. Conclusion - While Zoom does not currently appear to be a strong candidate for an earnings beat, investors are advised to consider other factors when making decisions regarding the stock ahead of the earnings release [16].