Core Insights - Zoom Video Communications (ZM) has experienced a significant recovery from its 2024 lows, with shares gaining 45% and outperforming the S&P 500 since mid-August 2024 [1][5] - The stock currently holds a Zacks Rank 1 (Strong Buy), reflecting positive EPS revisions among analysts [2][5] Financial Performance - In the latest financial release, ZM reported nearly 5% sales growth year-over-year, with adjusted EPS of $1.53, marking a 10% increase [6][8] - Operating cash flow reached $516 million, up from $449.3 million in the same period last year, while free cash flow increased nearly 40% year-over-year to $508 million [6] - The number of customers contributing over $100,000 in trailing 12-month revenue rose by 8.7% compared to the previous year, indicating a more lucrative customer base [7] Growth Outlook - The 5% quarterly sales growth rate is the highest in eleven periods, suggesting a positive turnaround for the company [8] - ZM has raised its sales and free cash flow guidance for the current fiscal year, with expected sales of $4.8 billion reflecting a 3.8% year-over-year growth [11][14]

Core Insights - Zoom Video Communications is set to report its Q2 results on August 21, 2025, with historical data indicating a 74% likelihood of negative one-day stock movements post-earnings, averaging a decline of -7.7% [2][3] Financial Performance - Current consensus forecasts for the upcoming quarter predict earnings per share (EPS) of $1.38 on revenue of $1.2 billion, compared to $1.39 EPS on $1.16 billion in revenue for the same quarter last year [3] - Zoom's market capitalization is currently $22 billion, with trailing twelve-month revenue of $4.7 billion, operating profit of $852 million, and net income of $1.0 billion [4] Historical Earnings Reaction - Over the past five years, there have been 19 observations of Zoom's one-day post-earnings returns, with only 5 positive returns, indicating a 26% chance of a positive reaction [7] - The median return for the 5 positive instances was 8.0%, while the median for the 14 negative returns was -7.7% [7] Post-Earnings Strategy - A pre-earnings strategy suggests weighing historical odds of positive versus negative reactions to inform positions before earnings releases [6] - A post-earnings strategy involves evaluating immediate reactions in relation to medium-term performance to guide trading decisions after earnings announcements [6] Correlation with Peers - Historical data indicates that peer performance can influence Zoom's post-earnings reactions, with potential pricing-in occurring prior to the earnings release [9]