Zoom Communications (NASDAQ: ZM) received a rating adjustment from Wall Street Zen, which downgraded the stock from a “strong-buy” to a “buy” in a report issued on October 10, 2023. This change reflects the shifting perspectives among analysts regarding the company’s future performance.
Several other financial institutions have also recently assessed Zoom’s potential. Wells Fargo & Company initiated coverage on September 30, 2023, assigning an “equal weight” rating and setting a price target of $90.00. Meanwhile, Dbs Bank upgraded Zoom to a “moderate buy” rating in a note published on September 16, 2023.
Piper Sandler reaffirmed a “neutral” rating with a target price of $85.00 on August 22, 2023. In contrast, Mizuho increased its price target from $95.00 to $100.00 on August 26, 2023, while Benchmark raised their objective from $102.00 to $110.00 on September 18, 2023. Overall, one analyst has rated the stock as a Strong Buy, eleven as Buy, sixteen as Hold, and one has issued a Sell rating. According to data from MarketBeat, Zoom currently holds an average rating of “Hold” with a consensus price target of $91.96.
Recent Earnings Report Highlights
Zoom Communications reported its quarterly earnings on August 21, 2023, revealing earnings per share (EPS) of $0.99. This figure fell short of analysts’ expectations, which anticipated an EPS of $1.38, resulting in a miss of $0.39. The company’s return on equity stood at 11.91%, with a net margin of 24.99%.
In terms of revenue, Zoom generated $1.22 billion for the quarter, surpassing analyst estimates of $1.20 billion. This marks a 4.7% increase in quarterly revenue compared to the same period last year, where the firm reported an EPS of $1.39. Looking ahead, Zoom has set its fiscal year 2026 guidance at an EPS range of $5.810 to $5.840, with Q3 2026 guidance between $1.420 and $1.440 EPS. Analysts project the company will post an EPS of $2.93 for the current fiscal year.
Insider Activity and Institutional Trading
In related developments, insider Velchamy Sankarlingam sold 7,660 shares of Zoom stock on October 10, 2023, at an average price of $82.00, amounting to a total transaction value of $628,120. Following this sale, he retained 132,795 shares, valued at approximately $10,889,190, which represents a 5.45% reduction in his ownership. This transaction was disclosed in a filing with the Securities and Exchange Commission.
Additionally, COO Aparna Bawa sold 10,528 shares on October 16, 2023, at an average price of $79.77, totaling $839,818.56. After this transaction, Bawa holds 1,978 shares valued at around $157,785.06, marking an 84.18% decrease in her position. Over the past 90 days, insiders have sold 321,470 shares valued at $26,684,150, with insiders owning 10.78% of the company’s stock.
Institutional investors have also been active, with several making adjustments to their stakes in Zoom. Notably, SouthState Corp acquired a new position valued at approximately $25,000 in the first quarter, while Elevation Point Wealth Partners LLC purchased shares worth $27,000 in the second quarter. REAP Financial Group LLC increased its stake by 181.7% in the same quarter, now owning 355 shares valued at $28,000. Institutional investors collectively hold 66.54% of Zoom’s stock.
Zoom Video Communications, Inc. operates a unified communications platform across various regions, including the Americas, Asia Pacific, Europe, the Middle East, and Africa. The company is known for its Zoom Meetings, which provide HD video, voice, chat, and content sharing capabilities. Zoom Phone offers an enterprise cloud phone system, while Zoom Chat facilitates messaging and content sharing across multiple devices.
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