2023-11-17 13:14:18 ET
Zoom Video Communications ( NASDAQ: ZM ) is set to report third quarter results on Monday and investors will focus on its guidance to get an idea of enterprise sales trend and performance from the company’s new products.
Zoom saw its sales surging during the pandemic as people flocked to its videoconferencing platform to maintain easy communication. However, people returning to offices after easing of lockdowns has taken a toll on the company.
Since then, Zoom has rolled out a slew of AI-powered products to offset its slowing sales growth and compete better with rivals including Microsoft Teams and Google.
Baird analyst William Power said the company's opportunities in Contact Center and Docs - new market that Zoom is entering in 2024, going up against Microsoft Office and Google Docs - should boost the company's long-term opportunities.
Aanlysts from Morgan Stanley also said that “pace of innovation” supports its constructive view on Zoom's “longer term opportunity and positioning in Enterprise.”
Wall Street expects California-based Zoom to report Earnings Per Share (EPS) of $1.07, while revenue is expected to rise just 1.8% to $1.12 billion.
“We believe enterprise should fare better than online, and could start to benefit from AI adoption, which we expect to be a key theme,” pointed out Power. He expects largely in-line results for the quarter.
Over the last two years, Zoom has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time.
Seeking Alpha and Wall Street analysts are conservative on the stock and rated it a “hold”, while Seeking Alpha’s Quant ratings consider it a “buy”.
Zoom, which has a market valuation of over $19 billion, has lost 4% so far this year.
Over the last three months, EPS estimates has been revised upward 24 times, compared to one downward revision. Revenue estimates have seen three upward revisions versus 15 downward moves.
More on Zoom
- Zoom Earnings Preview: GAAP Metrics Improving (Rating Upgrade)
- Zoom: With Earnings Strength And A Cash Hoard, This Stock Trades At An Unbelievable Price
- Zoom: Cheap Due To Massive Headwinds
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Investors’ focus on Zoom's guidance, new product performance during Q3 earnings