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Zoom Video Communications Inc (NASDAQ:ZM) jumped nearly 5.0% in extended hours after reporting better-than-expected results for its fiscal second quarter.
Zoom stock up on strong guidance
Shareholders are also cheering the company’s strong guidance for the full year.
Zoom now forecasts its per-share earnings to fall between $4.63 and $4.67 on an adjusted basis. In comparison, analysts had called for $4.32 a share of earnings in fiscal 2024. On CNBC’s “Closing Bell Overtime”, CFRA analyst Keith Snyder said today:
That EPS number is fantastic. Cost-cutting has been a huge initiative for them for the past few quarters. To see them grow and beat top and bottom like this is certainly a positive step forward for Zoom.
The communications technology company expects about $4.5 billion in revenue this year – roughly in line with Street estimates.
Notable figures in Zoom Q2 earnings release
- Earned $182 million versus the year-ago $45.8 million
- Per-share earnings also climbed from 15 cents to 59 cents
- Adjusted EPS printed at $1.34 as per the press release
- Revenue went up 13% year-on-year to $1.14 billion
- Consensus was $1.06 a share on $1.11 billion revenue
Shares of the California-based company are up only 5.0% year-to-date at writing. According to the CFRA analyst:
Half a billion of cash, they have no debt … we think M&A is a strong possibility for Zoom. They need to acquire new tech. They could push deeper into that space [AI] with an acquisition.
Should you buy Zoom stock here?
Zoom saw 3,672 of its customers bring in over $100,000 in revenue over the past twelve months. It ended the second quarter with 218,100 enterprise customers – up 1.0% versus last year. CFRA’s Snyder added:
That’s an important future area for them. They’re up against huge companies like Cisco and Microsoft. These platforms are ingrained in lot of enterprise – and to be winning customers is huge for Zoom.
Nonetheless, he maintained his “hold” rating on the Nasdaq-listed firm on Monday. His $75 price target suggests a near 10% upside from here.
The post CFRA analyst says “M&A is a strong possibility for Zoom” after a solid Q2 appeared first on Invezz.
