Zoom Communications (NASDAQ:ZM) Shares Gap Down – Here’s What Happened

Zoom Communications, Inc. (NASDAQ:ZM) gapped down prior to trading on Wednesday . The stock had previously closed at $100.92, but opened at $95.20. Zoom Communications shares last traded at $94.9520, with a volume of 1,473,975 shares traded.

Zoom Communications News Roundup

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

• Positive Sentiment: Zoom reported a second-quarter revenue and earnings beat: revenue rose 4.9% year over year to $1.28 billion, while adjusted EPS of $1.55 exceeded the $1.48 consensus estimate. Enterprise revenue grew 7.8%, its strongest pace in three years, and remaining performance obligations increased 14%. Zoom Beat Every Estimate and Fell Anyway. Citizens Says That’s Exactly the Point
• Positive Sentiment: Management raised its full-year fiscal 2027 outlook, supported by record Contact Center bookings and demand for AI-powered products. Analysts see enterprise adoption, AI features and broader product expansion as potential long-term growth drivers. Zoom Communications Inc. Q2 2027 Earnings Call Highlights
• Positive Sentiment: Needham reaffirmed its Buy rating and assigned a $130 price target. A separate bullish view cited Zoom’s strong cash position, 24.6% GAAP operating margin and the possibility that an Anthropic initial public offering could highlight the value of Zoom’s investment and net cash, estimated at roughly 40% of its market capitalization. Zoom: The Anthropic IPO May Be Coming
• Neutral Sentiment: Analyst reactions were mixed: Citizens JMP and KeyCorp maintained Market Perform and Sector Weight ratings, respectively, while Cantor Fitzgerald retained a Neutral view. RBC highlighted enterprise and AI opportunities but also pointed to pressure on margins and online-business growth.
• Negative Sentiment: Zoom’s third-quarter adjusted EPS forecast of $1.46–$1.48 was below Wall Street expectations. That softer near-term outlook, along with slowing consumer and online demand, initially overshadowed the quarterly beat and the full-year forecast increase. Why Zoom Stock Is Down Today

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on the stock. Sanford C. Bernstein reaffirmed a “market perform” rating and set a $108.00 price objective on shares of Zoom Communications in a research report on Wednesday. Piper Sandler boosted their target price on shares of Zoom Communications from $91.00 to $107.00 and gave the company a “neutral” rating in a research report on Friday, May 22nd. UBS Group upped their price target on shares of Zoom Communications from $105.00 to $115.00 and gave the stock a “neutral” rating in a report on Thursday, August 20th. KeyCorp reiterated a “sector weight” rating on shares of Zoom Communications in a research report on Wednesday. Finally, Cantor Fitzgerald reissued a “neutral” rating and issued a $104.00 price objective on shares of Zoom Communications in a research note on Monday. Sixteen analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the company’s stock. According to data from MarketBeat, Zoom Communications currently has a consensus rating of “Moderate Buy” and an average price target of $112.55.

Zoom Communications Price Performance

The stock has a 50-day simple moving average of $94.41 and a 200-day simple moving average of $91.39. The stock has a market cap of $29.40 billion, a P/E ratio of 9.28, a PEG ratio of 4.92 and a beta of 1.00.

Zoom Communications (NASDAQ:ZM) last issued its earnings results on Tuesday, August 25th. The company reported $1.55 EPS for the quarter, topping the consensus estimate of $1.48 by $0.07. Zoom Communications had a return on equity of 11.31% and a net margin of 65.19%.The firm had revenue of $1.28 billion during the quarter, compared to the consensus estimate of $1.27 billion. During the same quarter in the previous year, the firm earned $1.53 earnings per share. The business’s quarterly revenue was up 4.9% on a year-over-year basis. Zoom Communications has set its FY 2027 guidance at 6.080-6.120 EPS and its Q3 2027 guidance at 1.460-1.480 EPS. As a group, sell-side analysts forecast that Zoom Communications, Inc. will post 4.23 earnings per share for the current year.

Insider Activity at Zoom Communications

In other news, insider Velchamy Sankarlingam sold 7,644 shares of the company’s stock in a transaction on Wednesday, July 15th. The shares were sold at an average price of $91.98, for a total transaction of $703,095.12. Following the completion of the transaction, the insider directly owned 148,403 shares in the company, valued at approximately $13,650,107.94. This represents a 4.90% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Santiago Subotovsky sold 7,911 shares of the stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $101.33, for a total value of $801,621.63. Following the completion of the transaction, the director owned 127,060 shares of the company’s stock, valued at $12,874,989.80. The trade was a 5.86% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 56,155 shares of company stock valued at $5,654,761 in the last quarter. 8.83% of the stock is owned by company insiders.

Institutional Investors Weigh In On Zoom Communications

Hedge funds and other institutional investors have recently bought and sold shares of the company. California State Teachers Retirement System raised its position in Zoom Communications by 8,620.6% in the second quarter. California State Teachers Retirement System now owns 31,999,864 shares of the company’s stock valued at $2,761,908,000 after purchasing an additional 31,632,917 shares during the last quarter. Vanguard Group Inc. grew its holdings in shares of Zoom Communications by 4.0% during the fourth quarter. Vanguard Group Inc. now owns 26,967,224 shares of the company’s stock worth $2,327,002,000 after purchasing an additional 1,029,623 shares during the last quarter. AQR Capital Management LLC increased its stake in shares of Zoom Communications by 43.9% in the fourth quarter. AQR Capital Management LLC now owns 12,195,243 shares of the company’s stock valued at $1,052,328,000 after buying an additional 3,718,186 shares during the period. State Street Corp increased its stake in shares of Zoom Communications by 5.0% in the fourth quarter. State Street Corp now owns 7,582,924 shares of the company’s stock valued at $654,331,000 after buying an additional 363,776 shares during the period. Finally, Norges Bank bought a new position in Zoom Communications in the 4th quarter valued at approximately $509,788,000. Institutional investors own 66.54% of the company’s stock.

Zoom Communications Company Profile

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.