Zoom Video Communications, Inc. (NASDAQ: ZM) is scheduled to announce third-quarter earnings results on Monday, November 22, after market close. Zoom Video shares have weakened from $451 to $245 since February 16, 2021, and the current price stands at $251.
Zoom Video is an American communications technology company that provides video telephony and online chat services through a cloud-based peer-to-peer software platform. The company was incorporated in 2011 and completed an initial public offering in 2019.
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Zoom usage surged as the Covid-19 pandemic took hold in 2020 and remote work situations became commonplace. Zoom is constantly working on new features, and the company’s management announced last week a pilot advertising program as part of an effort to continue providing its basic level video conferencing service for free.
Chief Marketing Officer Janine Pelosi said that the program consists of ads being shown on users’ browser pages, but she didn’t detail the countries where users would see such ads.
Zoom Video will announce third-quarter earnings results this Monday, and it is important to say that over the last two years, Zoom has beaten EPS and revenue estimates every time.
The consensus earnings per share estimate for the third quarter stands at $1.10 (+11.1% Y/Y), while the consensus revenue estimate is $1.02 billion (+31.2% Y/Y). Despite this, there are also fears that Zoom’s earnings slowed down amid return-to-office across the globe, and Meta Marshall, the equity analyst at Morgan Stanley, added:
Investors lean cautiously heading into FQ3 print given ongoing concerns around SMB churn, particularly as other WFH names have underperformed. View FQ4 print as having more favorable risk/reward, but given cautious positioning, could see outperformance if SMB churn is better than expected.
The consensus Wall Street rating on Zoom Video remains bullish, and according to J.P. Morgan, Zoom has an attractive risk-reward profile after the drop in share price.
J.P. Morgan assigned a price target of $385 on Zoom, representing more than 50% upside potential compared with the current share price. The average analyst price target on Zoom Video is $355, and the video communication space as a whole is still poised to grow.
Technically, Zoom Video shares could advance above the current price levels if the company posts strong third-quarter results.
Zoom Video shares continue to trade near 2021 lows, but if the price jumps above $260, the next target could be $280 resistance.
On the other side, if the price falls below $240 support, the next target could be at $220 or even below.
Zoom Video is scheduled to announce third-quarter earnings results on Monday, November 22, after market close, and if the company posts strong ​results, the share price could be above the current levels. J.P. Morgan assigned a price target of $385 on Zoom, while the average analyst price target on Zoom Video is $355.
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