Zoom Video Earnings: What To Look For From ZM

Adam Hejl /
2022/05/22 8:13 am EDT
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Video conferencing platform Zoom (NASDAQ:ZM) will be reporting results tomorrow after market close. Here's what to expect.

Last quarter Zoom Video reported revenues of $1.07 billion, up 21.4% year on year, beating analyst revenue expectations by 1.56%. It was a weak quarter for the company, with the guidance for both the next quarter and the full year missing analyst estimates. The company lost 2,300 enterprise customers with more than 10 employees and ended up with a total of 509,800.

Is Zoom Video buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Zoom Video's revenue to grow 12.2% year on year to $1.07 billion, slowing down from the 191% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.88 per share.

Zoom Video Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 15.9%.

Looking at Zoom Video's peers in the video conferencing segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. 8x8 delivered top-line growth of 25.3% year on year, beating analyst estimates by 0.27% and RingCentral reported revenues up 32.7% year on year, exceeding estimates by 2.02%. 8x8 traded flat on the results, and RingCentral was up 4.56%. Read our full analysis of 8x8's results here and RingCentral's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022, and software stocks have not been spared, with share price down on average 17.4% over the last month. Zoom Video is down 11.3% during the same time, and is heading into the earnings with analyst price target of $150.4, compared to share price of $89.98.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.