Zoom shares exceed analysts expectations ahead of Q1 earnings

The video conferencing provider has seen its share exceed analysts price targets, with the stock capable of extending its gains if it delivers a strong set of quarterly earnings on Tuesday.

Zoom Video Communications will unveil its first quarter (Q1) earnings on Tuesday 1 June, with the stock already exceeding analysts’ target prices and capable of rallying even higher if it delivers a strong set of quarterly results.

The 22 analysts offering 12-month price forecasts for Zoom have a median target of $137.50 and a high estimate of $200, with the video conferencing company trading at $203.29 per share at the time of publication.

Wall Street analysts are expecting Zoom to deliver a earnings per share (EPS) of $0.10 on $202.5 million in Q1 sales – the company managed to exceed forecasters estimates in its previous quarter back in March, which helped drive a 60% gain for the stock in the week that followed.

If the video conferencing company can beat analysts expectations for another consecutive quarter it’s could help propel the stock even higher in weeks ahead, with investors also eager for an update on its full-year guidance.

How long will Zoom shares keep rising?

Since the start of the year, Zoom shares have climbed 195%, with the stock climbing 13% higher on Monday alone, ahead of the company’s latest quarterly earnings.

The company has come out on top amid the Covid-19 crisis and subsequent government-imposed lockdowns, which have forced businesses to invest heavily in video conferencing solutions with employees stuck working from home for the foreseeable future.

The shift in the way businesses are conducting work amid the Covid-19 pandemic has helped generate a strong increase in sales for the video conferencing company, but investors are eager to see if this uptick in revenues will remain as lockdown restrictions ease and people return to offices.

Zoom: technical analysis

Zoom has been one of the big winners of the 2020 Covid-19 market crisis, as millions around the world utilise its products. Unsurprisingly, that means the stock has been in high demand, forming an uptrend since February that will delight any trend follower.

We have seen higher highs and higher lows over this time, as rallies are followed up by modest retracements which continue to provide buying opportunities, according to Chris Beauchamp, chief market analyst at IG.

While the price has stalled around $180 since late April, weakness in late April and towards the end of May eventually resolved into a renewed rally, with the 50-day SMA (currently $150) and rising trendline support from mid-January providing support to the price, Beauchamp said.

‘The latest bounce takes the price on to $180 once more, with a break above here creating a new higher high and reinforcing the bullish view,’ he added. ‘A reversal below $150 would be needed to dent this, as for the time being the buyers are solidly in control.’

How to trade stocks with IG

Looking to trade the Zoom and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs and in a few easy steps:

  1. Create an IG trading account or log in to your existing account

  2. Enter ‘Zoom Video Communications’ in the search bar and select it

  3. Choose your position size

  4. Click on ‘buy’ or ‘sell’ in the deal ticket

  5. Confirm the trade


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get commission from just 0.08% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. All share prices are delayed by at least 20 minutes. Prices are indicative only.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.