Zoom Communications (NASDAQ:ZM) Updates Q3 2027 Earnings Guidance

Key Points

• Zoom raised its Q3 FY2027 EPS guidance to $1.46–$1.48, well above the $0.91 consensus estimate, while projecting revenue of about $1.3 billion. Full-year FY2027 EPS guidance was set at $6.08–$6.12.
• Despite the upbeat outlook, shares fell 3.7% to $100.92 in Tuesday trading. The stock has a “Moderate Buy” consensus rating and an average analyst price target of $111.64.
• Investors are weighing Zoom’s AI initiatives and potential Anthropic investment against concerns about customer churn and competitive pressure; insiders sold $5.65 million of stock over the past quarter, primarily through pre-arranged trading plans.

Zoom Communications (NASDAQ:ZM - Get Free Report) issued an update on its third quarter 2027 earnings guidance on Tuesday. The company provided earnings per share (EPS) guidance of 1.460-1.480 for the period, compared to the consensus EPS estimate of 0.910. The company issued revenue guidance of $1.3 billion-$1.3 billion, compared to the consensus revenue estimate of $1.3 billion. Zoom Communications also updated its FY 2027 guidance to 6.080-6.120 EPS.

Wall Street Analyst Weigh In

ZM has been the subject of a number of research analyst reports. Jefferies Financial Group upped their price target on Zoom Communications from $105.00 to $118.00 and gave the stock a "buy" rating in a report on Friday, May 22nd. Royal Bank Of Canada restated an "outperform" rating and issued a $130.00 price objective on shares of Zoom Communications in a research note on Tuesday, June 30th. Citigroup lifted their price objective on Zoom Communications from $122.00 to $126.00 and gave the stock a "buy" rating in a report on Tuesday, May 26th. Mizuho boosted their price objective on Zoom Communications from $100.00 to $120.00 and gave the company an "outperform" rating in a research report on Friday, May 22nd. Finally, Bank of America assumed coverage on Zoom Communications in a research note on Wednesday, August 19th. They issued a "buy" rating and a $130.00 target price for the company. Sixteen analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $111.64.

Zoom Communications Trading Down 3.7%

Shares of Zoom Communications stock traded down $3.91 during trading on Tuesday, reaching $100.92. The company's stock had a trading volume of 6,415,414 shares, compared to its average volume of 4,117,635. The stock has a 50-day moving average price of $93.83 and a two-hundred day moving average price of $91.23. Zoom Communications has a one year low of $70.70 and a one year high of $114.74. The stock has a market capitalization of $29.59 billion, a P/E ratio of 14.82, a price-to-earnings-growth ratio of 5.67 and a beta of 1.00.

Zoom Communications (NASDAQ:ZM - Get Free Report) last released its earnings results on Tuesday, August 25th. The company reported $1.55 EPS for the quarter, beating the consensus estimate of $1.48 by $0.07. The company had revenue of $1.28 billion during the quarter, compared to analysts' expectations of $1.27 billion. Zoom Communications had a return on equity of 11.87% and a net margin of 41.99%.Zoom Communications has set its FY 2027 guidance at 6.080-6.120 EPS and its Q3 2027 guidance at 1.460-1.480 EPS. As a group, sell-side analysts anticipate that Zoom Communications will post 4.21 EPS for the current fiscal year.

Insider Activity

In other news, Director Santiago Subotovsky sold 7,911 shares of Zoom Communications stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $101.33, for a total transaction of $801,621.63. Following the transaction, the director directly owned 127,060 shares of the company's stock, valued at $12,874,989.80. This trade represents a 5.86% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Velchamy Sankarlingam sold 7,644 shares of the business's stock in a transaction dated Wednesday, July 15th. The shares were sold at an average price of $91.98, for a total value of $703,095.12. Following the completion of the transaction, the insider directly owned 148,403 shares of the company's stock, valued at approximately $13,650,107.94. The trade was a 4.90% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 56,155 shares of company stock worth $5,654,761 over the last quarter. 8.83% of the stock is owned by insiders.

Key Stories Impacting Zoom Communications

Here are the key news stories impacting Zoom Communications this week:

• Positive Sentiment: Analysts remain constructive ahead of earnings. Needham highlighted Zoom’s potential, while BTIG reaffirmed a Buy rating and set a $125 price target, implying meaningful upside from recent levels. Needham positive on Zoom ahead of Q2 results Zoom analyst forecasts ahead of earnings
• Positive Sentiment: Zoom’s AI initiatives are a key potential catalyst, with investors watching adoption of AI-powered products and the company’s reported investment in Anthropic. A continued streak of revenue beats could reinforce the view that Zoom is undervalued relative to its growth opportunities. Why Zoom results could put its AI push in focus Zoom is cheap ahead of Q2 earnings
• Neutral Sentiment: Cantor Fitzgerald maintained a Neutral rating with a $104 price target, suggesting limited near-term upside and a cautious stance ahead of the report. Cantor Fitzgerald rating update
• Neutral Sentiment: Zoom shares have been firm relative to their longer-term moving averages, while broader mid-cap strength may provide some market support. However, the earnings release is likely to dominate trading in the near term. Zoom steps forward as midcaps firm near records
• Negative Sentiment: Analysts are also warning that customer churn could offset AI-related optimism. Investors will focus on retention, enterprise demand, guidance and management’s explanation of competitive pressures. Zoom Q2 preview and customer churn caution

Institutional Investors Weigh In On Zoom Communications

Several institutional investors and hedge funds have recently added to or reduced their stakes in ZM. Advocate Investing Services LLC acquired a new position in shares of Zoom Communications during the 4th quarter worth about $26,000. Strive Financial Group LLC acquired a new position in Zoom Communications during the fourth quarter valued at approximately $27,000. Towarzystwo Funduszy Inwestycyjnych PZU SA boosted its position in Zoom Communications by 83.3% during the fourth quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA now owns 440 shares of the company's stock valued at $38,000 after purchasing an additional 200 shares during the last quarter. Triumph Capital Management acquired a new position in Zoom Communications during the third quarter valued at approximately $50,000. Finally, UMB Bank n.a. grew its stake in Zoom Communications by 1,626.3% in the fourth quarter. UMB Bank n.a. now owns 656 shares of the company's stock valued at $57,000 after purchasing an additional 618 shares in the last quarter. 66.54% of the stock is owned by institutional investors.

About Zoom Communications

Zoom Video Communications, Inc (commonly referred to as Zoom) is a provider of cloud-based communications and collaboration solutions. The company's platform supports video conferencing, voice calling, instant messaging, webinars and large-scale virtual events, and meeting room systems, marketed to businesses, educational institutions, government organizations and individual users. Zoom's product lineup includes Zoom Meetings, Zoom Phone, Zoom Rooms, Zoom Video Webinars and Zoom Chat, and the company offers integrations and extensions through a developer marketplace and third-party apps.

Founded in 2011 by Eric S.

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