Zoom Communications (NASDAQ:ZM) Issues Earnings Results, Beats Expectations By $0.07 EPS

Zoom Communications (NASDAQ:ZM) posted its quarterly earnings results on Tuesday. The company reported $1.55 EPS for the quarter, beating analysts’ consensus estimates of $1.48 by $0.07, FiscalAI reports. The company had revenue of $1.28 billion during the quarter, compared to analyst estimates of $1.27 billion. Zoom Communications had a net margin of 41.99% and a return on equity of 11.87%. Zoom Communications updated its FY 2027 guidance to 6.080-6.120 EPS and its Q3 2027 guidance to 1.460-1.480 EPS.

Zoom Communications Trading Down 3.7%

Shares of ZM stock traded down $3.91 during midday trading on Tuesday, reaching $100.92. 6,415,414 shares of the stock were exchanged, compared to its average volume of 4,117,635. Zoom Communications has a 1 year low of $70.70 and a 1 year high of $114.74. The company’s 50 day moving average is $93.83 and its two-hundred day moving average is $91.23. The firm has a market cap of $29.59 billion, a PE ratio of 14.82, a price-to-earnings-growth ratio of 5.67 and a beta of 1.00.

Zoom Communications News Summary

Here are the key news stories impacting Zoom Communications this week:

• Positive Sentiment: Analysts remain constructive ahead of earnings. Needham highlighted Zoom’s potential, while BTIG reaffirmed a Buy rating and set a $125 price target, implying meaningful upside from recent levels. Needham positive on Zoom ahead of Q2 results Zoom analyst forecasts ahead of earnings
• Positive Sentiment: Zoom’s AI initiatives are a key potential catalyst, with investors watching adoption of AI-powered products and the company’s reported investment in Anthropic. A continued streak of revenue beats could reinforce the view that Zoom is undervalued relative to its growth opportunities. Why Zoom results could put its AI push in focus Zoom is cheap ahead of Q2 earnings
• Neutral Sentiment: Cantor Fitzgerald maintained a Neutral rating with a $104 price target, suggesting limited near-term upside and a cautious stance ahead of the report. Cantor Fitzgerald rating update
• Neutral Sentiment: Zoom shares have been firm relative to their longer-term moving averages, while broader mid-cap strength may provide some market support. However, the earnings release is likely to dominate trading in the near term. Zoom steps forward as midcaps firm near records
• Negative Sentiment: Analysts are also warning that customer churn could offset AI-related optimism. Investors will focus on retention, enterprise demand, guidance and management’s explanation of competitive pressures. Zoom Q2 preview and customer churn caution

Insider Transactions at Zoom Communications

In related news, Director Santiago Subotovsky sold 7,911 shares of the company’s stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $101.33, for a total value of $801,621.63. Following the sale, the director directly owned 127,060 shares of the company’s stock, valued at $12,874,989.80. This represents a 5.86% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Michelle Chang sold 8,489 shares of the business’s stock in a transaction on Friday, July 10th. The shares were sold at an average price of $90.80, for a total transaction of $770,801.20. Following the sale, the chief financial officer owned 35,452 shares in the company, valued at approximately $3,219,041.60. This trade represents a 19.32% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last quarter, insiders have sold 56,155 shares of company stock worth $5,654,761. 8.83% of the stock is owned by company insiders.

Hedge Funds Weigh In On Zoom Communications

A number of institutional investors and hedge funds have recently made changes to their positions in the business. Kestra Advisory Services LLC lifted its holdings in shares of Zoom Communications by 2.0% during the fourth quarter. Kestra Advisory Services LLC now owns 5,928 shares of the company’s stock valued at $512,000 after purchasing an additional 116 shares during the last quarter. Daiwa Securities Group Inc. grew its stake in shares of Zoom Communications by 0.7% in the 2nd quarter. Daiwa Securities Group Inc. now owns 24,395 shares of the company’s stock worth $1,902,000 after buying an additional 181 shares during the last quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA increased its position in Zoom Communications by 83.3% during the 4th quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA now owns 440 shares of the company’s stock valued at $38,000 after buying an additional 200 shares in the last quarter. Principal Securities Inc. raised its stake in Zoom Communications by 8.1% during the fourth quarter. Principal Securities Inc. now owns 3,053 shares of the company’s stock valued at $263,000 after buying an additional 230 shares during the last quarter. Finally, Utah Retirement Systems boosted its holdings in Zoom Communications by 0.6% in the fourth quarter. Utah Retirement Systems now owns 43,622 shares of the company’s stock worth $3,764,000 after acquiring an additional 245 shares in the last quarter. Institutional investors own 66.54% of the company’s stock.

Wall Street Analyst Weigh In

ZM has been the subject of several recent analyst reports. Royal Bank Of Canada reaffirmed an “outperform” rating and set a $130.00 price objective on shares of Zoom Communications in a research note on Tuesday, June 30th. Benchmark increased their price objective on Zoom Communications from $115.00 to $121.00 and gave the stock a “buy” rating in a report on Thursday, May 21st. Jefferies Financial Group lifted their price objective on Zoom Communications from $105.00 to $118.00 and gave the stock a “buy” rating in a research report on Friday, May 22nd. Rosenblatt Securities restated a “buy” rating and set a $130.00 target price on shares of Zoom Communications in a report on Friday. Finally, Needham & Company LLC reaffirmed a “buy” rating and issued a $130.00 price target on shares of Zoom Communications in a research note on Thursday, July 2nd. Sixteen research analysts have rated the stock with a Buy rating and twelve have issued a Hold rating to the company. Based on data from MarketBeat.com, Zoom Communications currently has a consensus rating of “Moderate Buy” and an average target price of $111.64.

About Zoom Communications

Zoom Video Communications, Inc (commonly referred to as Zoom) is a provider of cloud-based communications and collaboration solutions. The company’s platform supports video conferencing, voice calling, instant messaging, webinars and large-scale virtual events, and meeting room systems, marketed to businesses, educational institutions, government organizations and individual users. Zoom’s product lineup includes Zoom Meetings, Zoom Phone, Zoom Rooms, Zoom Video Webinars and Zoom Chat, and the company offers integrations and extensions through a developer marketplace and third-party apps.

Founded in 2011 by Eric S.