Yahoo Finance Results: Zoom Video Communications, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts
As you might know, Zoom Video Communications, Inc. (NASDAQ:ZM) recently reported its quarterly numbers. Revenues were US$1.1b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.70, an impressive 62% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zoom Video Communications after the latest results.
View our latest analysis for Zoom Video Communications
Taking into account the latest results, Zoom Video Communications' 32 analysts currently expect revenues in 2025 to be US$4.62b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 18% to US$2.21 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$4.62b and earnings per share (EPS) of US$1.92 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the decent improvement in earnings per share expectations following these results.
There's been no major changes to the consensus price target of US$76.68, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Zoom Video Communications at US$95.00 per share, while the most bearish prices it at US$58.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zoom Video Communications' past performance and to peers in the same industry. We would highlight that Zoom Video Communications' revenue growth is expected to slow, with the forecast 1.8% annualised growth rate until the end of 2025 being well below the historical 33% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that Zoom Video Communications is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Zoom Video Communications following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Zoom Video Communications going out to 2027, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Zoom Video Communications you should be aware of, and 1 of them is concerning.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
