Zoom(US:ZM) ZACKS·2025-09-30 22:51Core Viewpoint - Zoom Communications is experiencing a mixed performance in the stock market, with a recent decline in stock price despite positive earnings forecasts and a strong Zacks Rank indicating potential for growth [1][6]. Financial Performance - The upcoming earnings report for Zoom Communications is expected to show an EPS of $1.42, reflecting a 2.9% increase from the same quarter last year, with projected quarterly revenue of $1.21 billion, up 2.99% year-over-year [2]. - For the annual period, earnings are anticipated to be $5.81 per share and revenue is expected to reach $4.82 billion, indicating increases of 4.87% and 3.38% respectively compared to the previous year [3]. Analyst Estimates - Recent adjustments to analyst estimates for Zoom Communications suggest a positive outlook for the company's business operations and profitability, with upward revisions indicating confidence in short-term performance [4]. - The Zacks Consensus EPS estimate has increased by 1.12% over the past month, and Zoom Communications currently holds a Zacks Rank of 1 (Strong Buy), which has historically outperformed the market [6]. Valuation Metrics - Zoom Communications is currently trading at a Forward P/E ratio of 14.39, significantly lower than the industry average of 31, indicating that the stock is undervalued compared to its peers [7]. - The company has a PEG ratio of 7.16, which is higher than the Internet - Software industry's average PEG ratio of 2.27, suggesting that the stock's expected earnings growth is not fully reflected in its price [8]. Industry Context - The Internet - Software industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 59, placing it in the top 24% of over 250 industries, indicating a strong competitive position [8][9].