Zoom Stock Reverses Down As ZM Stock Earnings Beat Amid Slowing

Zoom Video Communications (ZM) reported third-quarter earnings and revenue on Monday that edged by estimates amid elevated turnover of small business customers. Zoom stock reversed down after initially rising on the earnings report.

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The San Jose, Calif.-based software maker released its report after the market close. Zoom earnings rose 12% to $1.11 a share on an adjusted basis from a year earlier.

Revenue jumped 35% to $1.051 billion. A year earlier, Zoom earned 99 cents a share on sales of $777.2 million.

Zoom stock analysts projected earnings of $1.09 a share on sales of $1.02 billion for the period ended Oct. 31.

Zoom Stock: Large Customer Growth

The company said it had 2,507 customers contributing more than $100,000 each annually, up from 2,278 as of July 31.

For the current quarter ending in January, Zoom Video forecast revenue of $1.052 billion vs. estimates of $1.018 billion.

“Looking forward, we expect to close the year between $4.079 to $4.081 billion in total revenue, representing approximately 54% year-over-year growth, alongside strong profitability and operating cash flow growth,” said Zoom founder and Chief Executive Eric Yuan, in the earnings release.

ZM stock fell 6.5% to 226.50 in extended trading on the stock market today, pulling back from earlier gains. ZM stock fell after the company’s earnings call with Wall Street analysts.

Zoom stock had retreated 28% in 2021 as investors anticipated slowing growth as the economy normalizes and more in-person meetings resume. In Monday’s regular session, Zoom stock fell 3.6%.

Zoom stock faces tough year-over-year growth comparisons after the coronavirus pandemic sparked demand for its videoconferencing software last year.

Heading into its earnings report, ZM stock owned an IBD Relative Strength Rating of only 7 vs. a best-possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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