Since the beginning of this year, Zoom has lost about half of its market capitalization-dropping from $54 billion to $27 billion alongside a declining stock market. Class A Common Stock (ZM) After-Hours Stock Quotes - Nasdaq offers after-hours quotes and extended trading activity data for. The mania was so dramatic that other publicly traded companies with Zoom-like names saw their stocks pop, too. Zoom’s stock shot up during the first year of the pandemic: from $89 a share on Feb.
The company offers a free version of its product to consumers (with time restrictions on calls) but makes money through business-to-business sales. While virtual-work competitors like Google (Google Meet) and Microsoft (Teams and Skype) offered similar products, Zoom represented a pure-play investment opportunity for investors seeking exposure to the budding remote work revolution. All that translated to the company’s bottom line: Sales were up 326% in 2020, to $2.6 billion, while profits rose to $672 million, from just $22 million in 2019. ZM stock is down more than 11% as of Tuesday morning.When the pandemic hit the US, Zoom usage soared overnight-the software was ubiquitous for anyone working a desk job, or trying to stay connected to friends and family while social distancing. For comparison, the company’s daily average trading volume is about 5 million shares. Currently, more than 7 million shares have changed hands as of this morning. Today’s poor earnings report brings with it heavy trading of ZM stock. We have implemented initiatives focused on driving new Online subscriptions, which have shown early promise but were not enough to overcome the macro dynamics in the quarter.” “The headwinds we saw mainly relate to the strengthening dollar, new Online subscriptions, and to a lesser extent bookings linearity. Kelly Steckelberg, CFO of Zoom, said the following in the company’s earnings report: That’s also below analysts’ revenue estimate of $4.54 billion for the year. To go along with that, Zoom’s revenue outlook fiscal full-year 2023 is between $4.385 billion and $4.395 billion. That doesn’t look good next to Wall Street’s estimate of $1.15 billion for the quarter. The company expects revenue to range from $1.09 billion to $1.1 billion during the period. The outlook for Q3 fiscal 2023 is not helping ZM stock today either. That’s despite its adjusted EPS decreasing 23% from the $1.36 in Q2 fiscal 2022.
That’s a shame, as the company’s adjusted earnings per share (EPS) of $1.05 did beat analysts’ estimate of 93 cents per share. However, it did still represent an 8% increase compared to the $1.02 billion reported in the same period last year. The bad news for ZM stock mainly comes from its revenue of $1.1 billion, which missed Wall Street’s estimate of $1.12 billion. Zoom (NASDAQ: ZM) stock is taking a beating on Tuesday after the video communications company released results for the second quarter of fiscal 2023.
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