Zoom Video Earnings: What To Look For From ZM

Adam Hejl /
2023/02/27 4:34 am EST
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Video conferencing platform Zoom (NASDAQ:ZM) will be announcing earnings results today after the bell. Here's what to look for.

Last quarter Zoom Video reported revenues of $1.1 billion, up 4.87% year on year, inline with analyst expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and slow revenue growth. The company added 170 enterprise customers paying more than $100,000 annually to a total of 3,286.

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 2.73% year on year to $1.1 billion, slowing down from the 21.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.82 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 missed Wall St's revenue estimates twice over the last two years.

Looking at Zoom Video's peers in the video conferencing segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. RingCentral delivered top-line growth of 17% year on year, missing analyst estimates by 0.6% and Five9 reported revenues up 20% year on year, exceeding estimates by 1.92%. RingCentral traded down 10.1% on the results, and Five9 was flat on the results. Read our full analysis of RingCentral's results here and Five9's results here.

The technology sell-off has been putting pressure on stocks since November and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 2.06% over the last month. Zoom Video is up 0.61% during the same time, and is heading into the earnings with analyst price target of $85.6, compared to share price of $74.6.

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.