Zoom Video logs first billion-dollar quarter, but the stock is still falling

4 weeks ago 9
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Zoom Video Communications Inc. reported its archetypal billion-dollar 4th Monday, but the videoconferencing company’s guidance sent shares plunging much than 10% successful after-hours trading.

Zoom ZM, +1.96% reported fiscal second-quarter nett income of $316.9 million, oregon $1.04 a share, compared with nett income of $185.7 million, oregon 63 cents a share, successful the year-ago quarter. The company’s adjusted nett income was $1.36 a share. Revenue soared 54% to $1.02 cardinal from $663.5 cardinal a twelvemonth ago.

Analysts surveyed by FactSet had expected adjusted nett income of $1.16 a stock connected gross of $991 million.

“In Q2, we achieved our archetypal billion-dollar gross 4th portion delivering beardown profitability and currency flow,” Zoom Chief Executive Eric Yuan said successful a connection announcing the results.

The better-than-expected top- and bottom-line quarterly results were undercut, however, by a tepid forecast for third-quarter earnings. Zoom gave guidance for betwixt $1.07 and $1.08 a stock of adjusted earnings, portion analysts polled by FactSet anticipated $1.10 a share.

While astir companies would beryllium ecstatic with income maturation of 54%, that is really the smallest year-over-year maturation successful gross for Zoom successful its recorded history, according to FactSet, which tracks its gross maturation backmost to April 2018, a twelvemonth earlier the company’s archetypal nationalist offering. The erstwhile debased was 77.9% successful the 4th ended January 2020, conscionable earlier the effects of the COVID-19 pandemic washed implicit the world.

Zoom’s forecast calls for maturation to dilatory more. The apical of its guidance scope for the 3rd 4th would bespeak year-over-year income maturation of 31.2% from the aforesaid 4th successful 2020.

The net and gross triumph followed an ebullient enactment past week from Morgan Stanley expert Meta Marshall, who raised her standing connected Zoom to overweight, aft being astatine adjacent value since she started covering the banal successful May 2019, a period aft it went public. Marshall raised her terms people to $400 from $360.

Read more: Zoom Video’s banal rallies aft Morgan Stanley says banal has gotten excessively inexpensive to ignore

This came arsenic invited quality for investors, who had seen the worth of their shares plummet much than 40% since Zoom’s banal peaked astatine a closing terms of $568.34 connected Oct. 19, 2020, connected a nationalist question of distant work. 

Zoom’s banal is up 3% truthful acold successful 2021. The broader S&P 500 scale SPX, +0.43%  has gained 20.6% this year.

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