Zoom shares: earnings and sales top expectations despite return to office

While the stock was up 5.9% it has been a serial underperformer in terms of return with a 1% rise against a 15% gain for the S&P 500.

(Video Transcript)

Zoom share price

Shares in Zoom video communications, the company did so well during the lockdown period, has seen sales and earnings top expectations. Let's take a look at the figures for the company. Excluding items, it posted second quarter profit of $1.34 per share compared with the target estimate of just over $1. Revenue for the quarter ended the 31st of July rose 3.6% to $1.14 billion.

Earnings per share

Now that too is above analysts average expectations of $1.12 billion. It also raised its annual earnings and revenue forecast as well. It now sees $4.63 to $4.67 in adjusted earnings per share up from $4.30. And in terms of revenue, that too has raised up to $4.48 to $4.49 billion in revenue up from $4.49 billion. This is for the full fiscal 2024 year.

Now, if we look at what happened in terms of the share price move yesterday, the stock was up almost 12% at one point yesterday, but then came a little bit of a pullback. But nonetheless, it ended up 5.96%. Now, this is going to be one of the big drivers at the start of today's trade for tech stocks, pretty much across the board, the company coming through with those earnings after the bell last night.

Zoom stock

Notwithstanding the after hours move, Zoom stock has declined around about 1% so far this year while the S&P 500 index has risen 15% over the same period. So you can see it's been a big outperformance by other companies and the index itself. And you can see the big loss of value that Zoom has had since the real highs that we had all the way back in the height of the lockdown when this stock was worth $588 per share. It's currently traded at $70.

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