Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Zoom Video share price on watch ahead of upcoming Q1 earnings

With Zoom Video’s share price having fallen 45% from its all-time high since October 2020, can its upcoming Q1 results provide a boost in sentiments?

Video poster image

When does Zoom Video report earnings?

Zoom Video Communications Inc is set to release its Q1 financial results on 1 June, after market close.

What to expect?

Zoom Video has largely benefitted from the Covid-19 pandemic, as businesses rapidly adopt usage of video-conferencing platforms in light of travel ban and social distancing. A look at Zoom Video’s customers breakdown reveals that the company has seen a multiple-fold increase in customers from the pandemic, in line with a big spike in high-budget customers who had spent more than $100K on the platform. That said, a key concern for investors is that of growth peaking, considering that growth for its customers’ base has declined on a quarter-to-quarter basis over the past two quarters.

You can trade Zoom Video Communications with IG by creating a trading account or log into your existing account to get started.

Chart 1 Source: Zoom Video Communications

In terms of geographical breakdown, an ongoing shift in revenue composition towards the EMEA and APAC regions may be expected to continue. This is in line with the company’s plans to expand its global footprints, particularly in Asia-Pacific which remains as its highest-growth segment on a year-on-year basis. This is also visible with its latest plans to open a new Research and Development centre and expand its co-located data centre in Singapore.

Chart 2 Source: Zoom Video Communications

Other than its international expansion, improved enterprise adoption for its Zoom Phone may also be a key growth catalyst ahead. As of January 2021, the company has 10,700 Zoom Phone customers with more than ten employees. Risks to its growth includes competition from Microsoft Teams and Cisco Webex, where potential launch of new features and services may remain a threat to Zoom Video’s platform.

How to trade Zoom Video earnings

Zoom Video’s forward P/E currently stands at 84.3, commanding a significant premium over the technology sector median of 18.6 and the software & IT services industry of 20.1.

Being only listed in 2019, much of its valuation have been largely priced based on its future growth. Having benefitted directly from the boom in video-conferencing brought about by Covid-19, investors will be on the lookout for its post-pandemic growth momentum as economic activities continue to normalise. Previous upbeat earnings results were unable to spur a sustained rally, denoting that investors remain wary of its high valuation in light of decelerating growth to be expected ahead.

Currently, the stock has 12 buy recommendations, 14 holds and two sells. The Bloomberg 12-month consensus target price of US$422.95 suggests a potential 29.6% upside from the price of US$326.43 at the time of writing.

You can trade Zoom Video Communications with IG by creating a trading account or log into your existing account to get started.

Technical analysis

Zoom Video’s share price has seen lower trading volume since the start of the year, seemingly losing traction as an initial Covid-19 play with ongoing normalisation. Its share price largely traded within a near-term downtrend, as seen from its lower price highs and lower price lows since hitting its peak in October 2020.

That said, a near-term recovery in share price may be supported by a bullish divergence formed on the MACD indicator on its recent price lows. Should price move higher, it may find resistance at the support-turned-resistance price level of US$342, where prices faced rejection on previous three occasions. If prices failed to break into a higher high, we may potentially see a continuation of its downtrend where prices may retrace towards its near-term support level of US$280.

Chart 3 Source: IG charts

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa 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. See full non-independent research disclaimer and quarterly summary.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access
Learn more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

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.