Zoom (ZM, $325.10) beats fiscal Q2 earnings; analysts boost outlook

Zoom Video Communications posted its fiscal second quarter results that crushed analysts’ estimates.

The video conferencing tech company’s non-GAAP earnings came in at 92 cents per share, well above consensus of 45 cents. 

Sales surged  +355% year-over-year  to $663.5 million, exceeding  analyst consensus of $500 million.

For the current quarter, Zoom projects total revenue to be within a range of $685 to $690 million. It expects  non-GAAP income of 73 or 74 cents. 

Looking farther ahead, Zoom raised its full-fiscal year sales guidance to between $2.37 billion and $2.39 billion (reflecting an expected year-over-year increase of 281% to 284%), versus prior guidance of $1.775 and $1.8 billion. It projects full-year  earnings of between $2.40 and $2.47.

Zoom’s prospects get bolstered by its widespread usage especially amid global rapid adoption of work-from-home practice due to the coronavirus pandemic.

Some analysts boosted their outlook on Zoom, following the earnings report. Goldman Sachs analyst Heather Bellini raised her rating on Zoom shares to neutral from sell, and also hiked her one-year price target to $402. 

BTIG analyst Matt VanVliet boosted rating on  the shares to buy from neutral with a $500 price target.

Citi analyst Walter Pritchard raising his price target to $377 from $217, but kept his rating neutral.

Tickeron's analysis shows: ZM in +10.32% Uptrend, advancing for three consecutive days on August 31, 2020

As a Bullish sign, keep an eye on this company's ticker for future growth. Considering data from situations where ZM advanced for three days, in 83 of 92 cases, the price rose further within the following month. The odds of a continued Uptrend are 90%.

Current price $325.10 is above $275.87 the highest resistance line found by A.I. Throughout the month of 07/30/20 - 08/31/20, the price experienced a +30% Uptrend. During the week of 08/24/20 - 08/31/20, the stock enjoyed a +15% Uptrend growth.

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator exceeded the 0 level on August 18, 2020. Traders may consider buying the ticker or exploring call options. In 19 of 23 cases where the ticker's Momentum Indicator exceeded 0, its price rose further within the subsequent month. The odds of a continued Uptrend are 83%.

The Moving Average Convergence Divergence (MACD) just turned positive. Considering data from situations where ZM's MACD histogram became positive, in 7 of 12 cases, the price rose further within the following month. The odds of a continued Uptrend are 58%.

The price moved above its 50-day Moving Average, which indicates a change from a Downtrend to an Uptrend. In 4 of 6 similar backtested cases where ZM's price crossed above its 50-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 67%.

The lower Bollinger Band was broken -- a price increase is expected as the ticker heads toward the middle band, which indicates a buy or call consideration for traders. In 4 of 5 cases where ZM's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued Uptrend are 80%.

Bearish Trend Analysis

The RSI Indicator demonstrated that the ticker has entered the overbought zone. Expect a price pull-back in the near future.

The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 9 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

The Aroon Indicator entered a Downtrend today. In 15 of 21 cases where ZM Aroon's Indicator entered a Downtrend, the price fell further within the following month. The odds of a continued Downtrend are 71%.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 82%. During the last month, the daily ratio of advancing to declining volumes was 1.81 to 1.

The Tickeron Price Growth Rating for this company is 34 (best 1 - 100 worst), indicating steady price growth. ZM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron SMR rating for this company is 38 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron PE Growth Rating for this company is 84 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Valuation Rating of 100 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ZM's P/B Ratio (101.68) is slightly higher than the industry average of (5.87). ZM has a moderately high P/E Ratio (1889.02) as compared to the industry average of (302.19). Projected Growth (PEG Ratio) (1.90) is also within normal values, averaging (7.18). Dividend Yield (0.00) settles around the average of (0.34) among similar stocks. P/S Ratio (48.14) is also within normal values, averaging (15.19).

The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ZM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 81, placing this stock worse than average.