Zoom Communications (NASDAQ:ZM) Reaches New 12-Month High Following Better-Than-Expected Earnings

Key Points

• Zoom Communications hit a new 52-week high after reporting stronger-than-expected quarterly results, with EPS of $1.55 versus $1.41 expected and revenue of $1.24 billion versus $1.22 billion forecast.
• The company also raised its outlook for the year, citing improving demand for AI features and enterprise usage as key growth drivers.
• Analyst sentiment turned more positive after earnings, with multiple firms lifting price targets and several upgrading the stock, helping reinforce the bullish move in shares.

Zoom Communications, Inc. (NASDAQ:ZM - Get Free Report)'s stock price reached a new 52-week high during mid-day trading on Friday after the company announced better than expected quarterly earnings. The company traded as high as $111.80 and last traded at $108.0030, with a volume of 1244778 shares. The stock had previously closed at $96.75.

The company reported $1.55 earnings per share for the quarter, topping the consensus estimate of $1.41 by $0.14. The firm had revenue of $1.24 billion during the quarter, compared to analyst estimates of $1.22 billion. Zoom Communications had a return on equity of 11.88% and a net margin of 39.03%.During the same period last year, the company posted $1.43 EPS. The business's quarterly revenue was up 5.5% on a year-over-year basis. Zoom Communications has set its FY 2027 guidance at 5.960-6.000 EPS and its Q2 2027 guidance at 1.450-1.470 EPS.

Key Stories Impacting Zoom Communications

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

• Positive Sentiment: Zoom beat Q1 earnings and revenue expectations, with EPS of $1.55 versus $1.41 expected and revenue of $1.24 billion versus $1.22 billion forecast, signaling continued operational strength.
• Positive Sentiment: The company raised its full-year outlook, with management pointing to stronger demand for AI features and enterprise usage, which suggests improving growth momentum. Reuters: Zoom raises annual forecasts, banks on AI features to drive demand
• Positive Sentiment: Several firms turned more constructive on the stock after earnings: Needham raised its target to $130 and reiterated Buy, BTIG lifted its target to $125 and Buy, Mizuho raised its target to $120 and Outperform, and Benchmark increased its target to $121 and Buy.
• Positive Sentiment: KeyCorp upgraded Zoom from Underweight to Sector Weight, adding to the improving analyst sentiment around the shares.
• Neutral Sentiment: Piper Sandler raised its price target to $107 but kept a Neutral rating, indicating limited near-term conviction despite the improved outlook.

Analysts Set New Price Targets

ZM has been the subject of several recent analyst reports. Benchmark raised their price objective on shares of Zoom Communications from $115.00 to $121.00 and gave the stock a "buy" rating in a research report on Thursday. KeyCorp raised shares of Zoom Communications from an "underweight" rating to a "sector weight" rating in a research note on Friday. Rosenblatt Securities raised their price target on shares of Zoom Communications from $115.00 to $130.00 and gave the stock a "buy" rating in a report on Friday. Wolfe Research raised shares of Zoom Communications from a "peer perform" rating to an "outperform" rating and set a $115.00 price target for the company in a research note on Thursday, February 5th. Finally, Cantor Fitzgerald reiterated a "neutral" rating on shares of Zoom Communications in a report on Friday. Fourteen investment analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the company. According to MarketBeat.com, Zoom Communications presently has a consensus rating of "Moderate Buy" and an average target price of $104.20.

Insider Buying and Selling

In other Zoom Communications news, CFO Michelle Chang sold 8,489 shares of the company's stock in a transaction on Friday, April 10th. The shares were sold at an average price of $81.32, for a total transaction of $690,325.48. Following the transaction, the chief financial officer owned 30,467 shares in the company, valued at approximately $2,477,576.44. This represents a 21.79% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Eric S. Yuan sold 69,923 shares of the firm's stock in a transaction on Monday, April 13th. The shares were sold at an average price of $81.22, for a total transaction of $5,679,146.06. Following the completion of the transaction, the chief executive officer directly owned 36,796 shares in the company, valued at $2,988,571.12. This trade represents a 65.52% 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 144,329 shares of company stock worth $12,364,989 over the last quarter. Corporate insiders own 11.51% of the company's stock.

Hedge Funds Weigh In On Zoom Communications

Several large investors have recently added to or reduced their stakes in ZM. Mitsubishi UFJ Asset Management Co. Ltd. raised its holdings in shares of Zoom Communications by 10.5% in the third quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 238,753 shares of the company's stock valued at $19,697,000 after purchasing an additional 22,704 shares during the last quarter. Strive Asset Management LLC purchased a new position in Zoom Communications during the third quarter worth about $1,238,000. LSV Asset Management grew its position in Zoom Communications by 5.0% in the 3rd quarter. LSV Asset Management now owns 1,069,440 shares of the company's stock worth $88,229,000 after purchasing an additional 50,579 shares in the last quarter. Krilogy Financial LLC purchased a new stake in Zoom Communications in the 3rd quarter valued at about $1,963,000. Finally, Sherry Group Inc. purchased a new stake in Zoom Communications in the 4th quarter valued at about $894,000. Institutional investors own 66.54% of the company's stock.

Zoom Communications Trading Up 11.0%

The company's 50-day simple moving average is $88.14 and its 200 day simple moving average is $86.59. The stock has a market cap of $31.66 billion, a P/E ratio of 17.32, a PEG ratio of 5.69 and a beta of 1.00.

Zoom Communications Company Profile

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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