Zoom’s Steady Climb: Analyzing Recent Performance and Future Outlook
Zoom Communications (ZM) recently closed at $91.12, marking a 2.79% increase from the previous day, outpacing the S&P 500’s 0.56% gain. This positive momentum continues a trend, with Zoom’s stock rising 9.01% over the past month, even as the broader Computer and Technology sector experienced a loss.
Earnings on the Horizon: What to Expect
Investors are keenly focused on Zoom’s upcoming earnings report on February 25, 2026. Current projections estimate earnings of $1.48 per share, representing a 4.96% year-over-year increase. Revenue is anticipated to reach $1.23 billion, a 4.08% rise compared to the same quarter last year. Looking at the full fiscal year, analysts forecast earnings of $5.96 per share and revenue of $4.85 billion, indicating growth of 7.58% and 4%, respectively.
Analyst Sentiment and the Zacks Rank
Changes in analyst estimates are crucial indicators of a company’s trajectory. Upward revisions often signal optimism about a company’s operations and profitability. Zoom currently holds a Zacks Rank of #3 (Hold), based on a system that incorporates these estimate changes. Historically, stocks with a Zacks Rank of #1 have delivered an average annual return of +25% since 1988.
Valuation Metrics: Is Zoom Undervalued?
Zoom is currently trading at a Forward P/E ratio of 14.93, which is lower than the industry average of 19.47. This suggests that Zoom may be trading at a discount relative to its peers. The company’s PEG ratio is 5.2, although the industry average is 1.1. The PEG ratio considers earnings growth, offering a more comprehensive valuation perspective.
Industry Context and Future Potential
Zoom operates within the Internet – Software industry, which currently holds a Zacks Industry Rank of 128, placing it in the bottom 48% of all industries. Historically, the top 50% of ranked industries have outperformed the bottom half by a factor of 2 to 1.
The Evolution of the Work Platform
Zoom has evolved from a video conferencing tool to an AI-first work platform, offering features like Zoom Meetings, Zoom Phone, and Zoom Team Chat. This expansion positions the company to capitalize on the growing demand for integrated communication and collaboration solutions. The company provides a cloud-based communications platform concentrating on improving the video conferencing experience, including features like online collaborative meetings, voice and chat capabilities, and collaborative file sharing.
Key Data Points at a Glance
- Market Cap: $26 Billion
- Revenue (TTM): $4.81 Billion
- Net Income: $1.59 Billion
- EPS: $5.13
- Employees: 7,412
Frequently Asked Questions
Q: What is Zoom’s Zacks Rank?
A: Zoom currently holds a Zacks Rank of #3 (Hold).
Q: When is Zoom’s next earnings report?
A: Zoom is scheduled to release its earnings on February 25, 2026.
Q: What is Zoom’s Forward P/E ratio?
A: Zoom’s Forward P/E ratio is currently 14.93.
Q: What does Zoom offer beyond video conferencing?
A: Zoom offers a comprehensive work platform including Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom Mail and Calendar.
Did you know? Zoom’s market capitalization is approximately $26 billion.
Pro Tip: Keep a close eye on analyst revisions, as they can be a leading indicator of future stock performance.
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