Zoom Q2 Earnings to Rise Over 26%, Revenue to Jump Nearly 50%

The San Jose, California-based communications technology company Zoom is expected to report its second-quarter earnings of $1.16 per share, which represents year-over-year growth of over 26% from $0.92 per share seen in the same period a year ago.

The company, which provides video telephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of about 50% to $990.2 million. Zoom will report 2Q FY22 earnings after market close on Monday, August 30th.

Zoom expects to report revenue of $985 million to $990 million and adjusted earnings of $1.14 to $1.15 per share in the second quarter. In its full-year guidance, the company now expects revenue of $3.98 billion – $3.99 billion, and adjusted earnings of $4.56 – $4.61 per share.

Zoom shares have been range-bound so far this year. The stock ended 0.74% lower at $337.74 on Wednesday.

Analyst Comments

“Continuation of WFH and structural increase in usage of video, progress in Phone, and pending FIVN acq supports Zoom Video Communications’ (ZM) longer-term platform opportunities. With Delta variant likely slowing NT churn, FQ2 expectations skew high. Remain EW but positively inclined w/ next legs of growth coming into view,” noted Meta A Marshall, equity analyst at Morgan Stanley.

“Zoom has established its position as the newly emerged leader in video conferencing, now a growth market, largely credible to the company itself given an introduction of a solution that employees actually use. The company has a meaningful competitive moat built on more than just architecture, but a rapid uptick in video usage has attracted significant investment efforts from competitors. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins are encouraging. Expanding platform with pending FIVN acquisition. Environment post-COVID and large-scale WFH, and timing to reach, less certain.”

Zoom Stock Price Forecast

Twenty-one analysts who offered stock ratings for Zoom Video Communications in the last three months forecast the average price in 12 months of $421.75 with a high forecast of $495.00 and a low forecast of $345.00.

The average price target represents a 24.87% change from the last price of $337.74. From those 21 analysts, 10 rated “Buy”, 11 rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $360 with a high of $480 under a bull scenario and $240 under the worst-case scenario. The firm gave an “Equal-weight” rating on the communications software company’s stock.

Several other analysts have also updated their stock outlook. BTIG slashed the stock price forecast to $495 from $550. Deutsche Bank raised the target price to $375 from $360. JPMorgan lowered the target price to $385 from $456.

Check out FX Empire’s earnings calendar