The Zoom stock reverses as ZM stock earnings hit amid declining growth

Zoom video communication (ZM) reported third-quarter earnings and sales on Monday, which were limited by estimates in the middle of increased sales of small business customers. The zoom stock turned down after first rising on the earnings report.


The San Jose, California-based software maker released its report after the market closed. Zoom earnings rose 12% to $ 1.11 per share on an adjusted basis from the previous year.

Revenue rose 35% to $ 1.051 billion. A year earlier, Zoom earned 99 cents per share on a $ 777.2 million sale.

Zoom stock analysts estimated earnings of $ 1.09 per share on sale at $ 1.02 billion for the period ended October 31.

Zoom stock: Great customer growth

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

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

“Looking ahead, we expect to end the year between $ 4.079 to $ 4.081 billion in total revenue, representing approximately 54% year-over-year growth, along with strong profitability and cash flow growth,” said Zoom founder and CEO Director Eric Yuan, in the earnings report.

The ZM share fell 6.3% to 227 in expanded trading on the stock market today, and is retreating from previous gains. ZM shares fell after the company’s earnings talks with Wall Street analysts.

The Zoom share had retreated by 28% in 2021 as investors expected declining growth as the economy normalized and more personal meetings resumed. In Monday’s ordinary session, the Zoom share fell 3.6%.

The Zoom stock faces tough growth comparisons from year to year after the coronavirus pandemic triggered demand for video conferencing software last year.

On its way into the earnings report, the ZM stock owned an IBD Relative Strength Rating of just 7 against a best possible 99, according to the IBD Stock Checkup.

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

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