Zoom Video Communications Inc. enjoyed one of the biggest bang-up earnings reports in early June, as the COVID-19 epidemic made the company’s name synonymous with videoconferencing and attracted millions of new users to its service.
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Profit exceeded ten-fold, exploded with a 169% increase in revenue, and the company doubled its expectations for full-year sales. An analyst on Zoom’s conference call said the quarterly is the biggest quarter in enterprise-software history, and Zoom shares – which many believe went too far in that report – in the three months since Has achieved more than 80%.
For more: Zoom’s surprising quarter shows that it is a force that remains a force even after workers return to office
There is only one problem with that type of performance: how do you follow it? On Wall Street, an outstanding performance only raises expectations for it when Zoom reports second-quarter earnings on Monday afternoon.
Analysts at Morgan Stanley reported last week that the “buy-side” expected Zoom to beat consensus estimates by about 30%, according to company forecasts of about half a billion dollars of revenue in the quarter. Analysts’ estimates accelerated. And even Morgan Stanley analysts, who are not as sharp on Zoom as other banks with a similar weight rating on the stock, believe Zoom will meet those expectations – at least for now.
Analysts wrote, “In general, we think buy-side expectations for FQ2 (~ 30% beat) can be achieved and the company has the ability to guide it slightly or flat sequentially. Will be. An August 20 note in which he raised his price target on Zoom from $ 190 to $ 240. “However, with call-side expectations for a significant continuation of the growth trajectory in FY22 and FY23, we are aware that there may be some valuation contraction as sequential growth is slow in the previous part.”
Analysts cited strong growth in app downloads and users, along with reasons for another strong performance, as users signed up for payment plans after their feet got wet with a free account in the first pandemic.
“App download [and monthly active users] Analysts at RBC Capital Markets wrote in an August 17 note that stay strong and we show F2Q21 revenue path ahead of consensus expectations. All I Wanna Do is Zoom-A-Zoom-Zoom in reference to the 90s rap rap “Rump Shucker”.
Analysts, which held better ratings and raised their price targets from $ 250 to $ 300, said that SensorTower data showed that the metrics “moderation from April peaks are still well above pre-COVID levels Live. ”
Zoom is also rolling out new initiatives, expanding its Zoom Phone cloud-telephony service to new countries and offering hardware-as-a-service offerings as well as Zoom for home devices. While it may not immediately make a physical difference, it is additive in the long-term and helps zoom competition against legacy offerings such as Cisco Systems Inc.’s CSCO.
Analysts at William Blair said in Wednesday’s note that we continue to see zoom phones as an interesting component of the company’s market opportunity. “Our industry interactions show that growth around this product has continued, as well as the continued expansion of core international support, driving legacy solutions as well as competitive wins against modern UCAS providers.”
Zoom may already have the largest share of the videoconferencing market, continuing to try to differentiate customers from rivals. JPMorgan analysts reported on July 31 that Zoom has now occupied nearly half of the videoconferencing market in more than a year following its ongoing public offering.
“Zoom has captured the largest share of the stock market
From 34% of the total MAU in March to more than 48% from July 24, ”analysts wrote, maintaining an overweight rating. Google GOOGL,
It also seems to have captured market share, but their offering is taking advantage of the freebies we think for education customers and small businesses that are not where we see the greatest long-term opportunities for Zoom. ”
what to expect
Income: According to FactSet, analysts expected adjusted earnings of 45 cents per share on average, up from 8 cents a share a year earlier, after Zoom directed to adjusted earnings of 44 cents to 46 cents per share. Analysts said that the final earnings report from Zoom accounted for 11 cents in adjusted earnings.
Estimate, a software platform that estimates congestion from hedge-fund executives, brokerages, by-side analysts and others, reports an average projection of 50 cents per share in adjusted earnings.
Revenue: According to FactSet, analysts expect revenue of $ 500 million on average, with sales of $ 1465 million to $ 500 million in the year before Zoom. Analysts were expecting an average of less than $ 225 million before forecasts rose in early June.
Contributors expect revenue of $ 531.9 million on average to be estimated.
stock movement: Zoom stock has increased since the company went public, releasing earnings in three to five instances, including both events so far until 2020, when the shares rose 7% and 7.6%, respectively. As the S&P 500 Index SPX soared 339.8% this year, the stock overall has exceeded this year,