Zoom was the fifth-most-downloaded app in 2020 and experienced 30x growth in daily meeting participants between December 2019 and April 2020. Zoom Video is expected to post earnings of $1.30 per share for the current quarter, representing a year-over-year change of +0.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%. At the peak of the pandemic in April 2020, Zoom hosted over 300 million daily meeting participants, who used the platform to attend online classes, work remotely, and stay in touch with their friends and family members. But that growth was a double-edged sword, since many of those people were free users who didn’t generate any revenue. Its free meetings are capped at 40 minutes per session with a maximum capacity of 100 attendees, while its paid tiers provider longer time limits, room for more attendees, and other cloud-based services.
Zoom Communications, Inc.
- While Zoom has fallen out of favor with some investors, the business fundamentals still look good, the company is profitable, and it’s leaning into the potential of AI for its business.
- The company was incorporated in 2011 and is headquartered in San Jose, California.
- Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
- Zoom Virtual Agent is a self-service chatbot that can handle a wide range of issues, including complex customer problems, and an AI virtual voice agent that enables self-service voice calls.
- At its peak, Zoom’s enterprise value reached $160 billion — or 60 times the revenue it would generate in fiscal 2021.
Yuan said Huang was joining Zoom at an “optimal moment” as it Grid trading rolled out new AI tools across its platform. Zoom Video is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade. Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company’s earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Pros and cons of investing in Zoom stock
In the case of Zoom Video, the consensus sales estimate of $1.16 billion for the current quarter points to a year-over-year change of +2.3%. The $4.64 billion and $4.76 billion estimates for the current and next fiscal years indicate changes of +2.4% and +2.7%, respectively. Zoom Video Communications, Inc. engages in the provision of video-first communications platform. It connects people through frictionless video, voice, chat and content sharing, and enable face-to-face video experiences for thousands of people in a single meeting across disparate devices and locations. It focuses on customer and employee happiness, a video-first cloud architecture, recognized market leadership, viral demand, an efficient go-to-market strategy, and robust customer support.
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If you have received this message in error, please contact our support team at Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Looking ahead, Zoom’s strategic initiatives revolve around becoming an AI-first company, with a focus on its AI Companion tool, which is driving increased productivity for customers. If you want to buy Zoom stock, you can easily add shares to your portfolio.
By September 2013, Zoom raised a Series B round of funding to the tune of $6.5 million and had 3 million daily participants using its meeting software. Compared to the Zacks Consensus Estimate of $1.15 billion, the reported revenues represent a surprise of +1.22%. While media releases or rumors about a substantial change in a company’s business prospects usually make its stock ‘trending’ and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making. As long as you’re not expecting pandemic-era returns and want to invest in Zoom stock for its more mature business potential, there’s a lot for investors to like about this stock. The pandemic also marked Zoom’s first foray into selling hardware products, with offerings like Zoom Rooms and Zoom Phone becoming available to customers who could pay a monthly subscription for hardware and accompanying services. Here at Zacks, we prioritize appraising the change in the projection of a company’s future earnings over anything else.
How to buy Zoom Video Communications stock
If you want to know the ins and outs of how to invest in Zoom stock, whether or not it’s currently profitable, and how the business is doing, keep on reading. The first version of Zoom Meetings allowed up to 25 participants per conference. By the end of Zoom’s first month in business, it already had close to half a million users; a few months later, that figure was up to 1 million users.
Zoom to Release Financial Results for the Third Quarter of Fiscal Year 2026
Zoom Video reported revenues of $1.16 billion in the last reported quarter, representing a year-over-year change of +2.1%. While earnings growth is arguably the most superior indicator of a company’s financial health, nothing happens as such if a business isn’t able to grow its revenues. After all, it’s nearly impossible for a company to increase its earnings for an extended period without increasing its revenues.
Valuation Measures
- The company was formerly known as Zoom Video Communications, Inc. and changed its name to Zoom Communications, Inc. in November 2024.
- We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends.
- The Motley Fool has positions in and recommends Cisco Systems, Microsoft, and Zoom Video Communications.
- Those new features include Zoom Scheduler, which schedules meetings with people outside an organization; Intelligent Director, which uses AI and multiple cameras to capture the clearest images and angles; and its Zoom Virtual Agent chatbot for customer support.
The Motley Fool has positions in and recommends Cisco Systems, Microsoft, and Zoom Video Communications. Zoom’s gross margin rose from 69% in fiscal 2021 to 75% in fiscal 2023 and then expanded again to 76% in the first half of fiscal 2024. The facts discussed here and much other information on Zacks.com might help determine whether or not it’s worthwhile paying attention to the market buzz about Zoom Video. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term. For privacy and data protection related complaints please contact us at Please read our PRIVACY POLICY STATEMENT for more information on handling of personal data.
For Zoom Video, the consensus sales estimate for the current quarter of $1.16 billion indicates a year-over-year change of +2.3%. For the current and next fiscal years, $4.64 billion and $4.76 billion estimates indicate +2.4% and +2.7% changes, respectively. The company beat consensus EPS estimates in each of the trailing four quarters.
Here’s Why Zoom Communications (ZM) is a Strong Growth Stock
In the spring of 2012, the company relaunched as Zoom, and by September of that year, it had introduced a beta version of its software that could host conferences with as many as 15 participants. In 2013, Zoom officially released Zoom Meetings to the public after raising $6 million in a Series A round of funding. In its latest quarter, Cisco’s collaboration revenue — which includes Webex — fell 12% year over year and marked its fourth consecutive quarter of top-line declines.
Many investors are already familiar with that boom-and-bust story, so today I’ll focus on three other aspects of Zoom’s business that also deserve their attention. Your investment style can dictate which kind of fund is best for your portfolio. Meanwhile, the Zoom AI Companion does everything from providing meeting summaries and action items from in-person meetings to recommending what days employees should work from the office to what meeting rooms they should use based on workforce scheduling. Select to analyze similar companies using key performance metrics; select up to 4 stocks. Zoom Video Communications (ZM) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock’s performance in the near term.
It also hosted its first annual user conference (Zoomtopia) in 2017 and launched its telehealth platform. In these years, the company rapidly integrated its solutions with those of existing companies that included Salesforce (CRM -5.31%), Slack (now owned by Salesforce), Microsoft (MSFT -1.98%), Meta Platforms (META -2.67%), and Alphabet (GOOGL +0.15%)(GOOG +0.21%). Early on in its business journey, the company raised $3 million in seed money from venture capitalists and various company leaders, including the founder of WebEx.
Zoom Video Communications (ZM) has recently been on Zacks.com’s list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock’s performance in the near future. As with any stocks you’re considering for your portfolio, make sure you understand the business you’re buying and whether it fits into the basket of stocks you’re building before you commit your hard-earned capital. Zoom launched its artificial intelligence (AI)-powered assistant Zoom AI companion in 2023, and a new AI-powered collaboration platform called Zoom Workplace in 2024. Zoom has been faced with headwinds as growth has normalized in recent years from pandemic heights, and it’s had to slash its workforce. In 2017, Zoom hit a $1 billion valuation after raising $100 million in Series D funding from Sequoia Capital.
And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors’ interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. For the current fiscal year, the consensus earnings estimate of $5.31 points to a change of +1.9% from the prior year. The consensus earnings estimate of $5.31 for the current fiscal year indicates a year-over-year change of +1.9%.
Yuan’s departure came back to haunt Cisco, as Zoom’s catchy brand and simple interface made it an appealing alternative to complicated enterprise-oriented platforms during the pandemic. Cisco scrambled to catch up to Zoom by updating Webex, but it failed to gain much traction before the entire video conferencing market suffered a post-pandemic slowdown. That’s why Zoom now trades at about $68 with an enterprise value of $14 billion, or just three times the $4.5 billion in revenue it’s expected to generate in fiscal 2024. But it only expects its revenue to rise 2% this year as its adjusted earnings grow 6% to 7% — so it certainly seems like its hypergrowth days are over. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. In the first quarter of fiscal year 2026, Zoom’s total revenue was $1.2 billion, a year-over-year increase of about 3%.
With more than a decade in business under its belt, Zoom is also much more than a software business, although Zoom Meetings remains a core part of the business and a market leader in videoconferencing solutions. Besides products like Zoom Phone and other workplace tools and solutions, its AI investments could drive meaningful growth for the business over the next five to 10 years. Even as Zoom’s trajectory has normalized from the triple-digit growth figures it was reporting several years ago and investors have displayed more apathy towards the stock over the last couple of years, this is also a far more mature business than five or six years ago. Investors who want to put cash into the tech stock space can certainly still find a lot to like about this business, especially because it’s still in strong financial shape and making steady investments in the world of artificial intelligence. While the business is maturing and may not witness pandemic-level growth again, the stock could still make an attractive addition for some investors with a well-diversified portfolio.
S. Malik is a passionate content writer and creative thinker with a flair for storytelling that blends clarity, insight, and imagination. With a strong background in digital media and a keen interest in diverse topics ranging from technology to lifestyle, S. Malik crafts engaging and informative content tailored to resonate with modern readers. Driven by curiosity and a commitment to quality, Malik continues to explore new ideas and deliver impactful narratives across platforms.