Zoom Communications (NASDAQ:ZM) Trading Down 5.6% - Should You Sell?

Key Points

• Shares fell 5.6% to about $79.31 on Friday with trading volume ~57% below the average, signaling a notable intra‑day drop from a prior close of $84.03.
• Analysts are mixed with a market consensus of "Hold" and a consensus price target of $95.32 (14 Buys, 13 Holds, 1 Sell), reflecting differing views on Zoom’s outlook.
• Zoom reported Q results where EPS missed by $0.04 ($1.44 vs. $1.48) while revenue slightly beat ($1.25B vs. $1.23B), and issued FY2027 EPS guidance of 5.770–5.810 and Q1 2027 guidance of 1.400–1.420.

Zoom Communications, Inc. (NASDAQ:ZM - Get Free Report)'s share price fell 5.6% on Friday . The company traded as low as $79.35 and last traded at $79.3120. 1,764,179 shares traded hands during mid-day trading, a decline of 57% from the average session volume of 4,056,492 shares. The stock had previously closed at $84.03.

Analysts Set New Price Targets

A number of research firms have recently weighed in on ZM. Citigroup upgraded shares of Zoom Communications from a "neutral" rating to a "buy" rating and boosted their target price for the stock from $94.00 to $106.00 in a report on Monday, January 12th. BTIG Research reduced their target price on shares of Zoom Communications from $105.00 to $100.00 and set a "buy" rating on the stock in a report on Thursday, February 26th. Benchmark reduced their target price on shares of Zoom Communications from $115.00 to $110.00 and set a "buy" rating on the stock in a report on Tuesday, February 24th. Rosenblatt Securities reissued a "buy" rating and set a $115.00 target price on shares of Zoom Communications in a research report on Thursday, February 26th. Finally, Zacks Research downgraded Zoom Communications from a "strong-buy" rating to a "hold" rating in a research report on Friday, February 13th. Fourteen investment analysts have rated the stock with a Buy rating, thirteen have given a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Hold" and a consensus price target of $95.32.

Zoom Communications Trading Down 7.3%

The company has a market capitalization of $22.96 billion, a PE ratio of 12.59, a PEG ratio of 4.76 and a beta of 0.88. The firm's 50-day simple moving average is $82.82 and its 200-day simple moving average is $83.96.

Zoom Communications (NASDAQ:ZM - Get Free Report) last announced its quarterly earnings results on Wednesday, February 25th. The company reported $1.44 earnings per share for the quarter, missing the consensus estimate of $1.48 by ($0.04). Zoom Communications had a return on equity of 11.88% and a net margin of 39.03%.The business had revenue of $1.25 billion during the quarter, compared to analysts' expectations of $1.23 billion. During the same period in the previous year, the company posted $1.41 EPS. Zoom Communications's revenue for the quarter was up 5.3% on a year-over-year basis. Zoom Communications has set its FY 2027 guidance at 5.770-5.810 EPS and its Q1 2027 guidance at 1.400-1.420 EPS. As a group, analysts anticipate that Zoom Communications, Inc. will post 2.93 EPS for the current year.

Insider Transactions at Zoom Communications

In other news, CEO Eric S. Yuan sold 12,100 shares of the company's stock in a transaction that occurred on Monday, February 2nd. The shares were sold at an average price of $93.01, for a total value of $1,125,421.00. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CFO Michelle Chang sold 8,417 shares of the company's stock in a transaction that occurred on Monday, January 12th. The stock was sold at an average price of $86.54, for a total transaction of $728,407.18. Following the completion of the sale, the chief financial officer directly owned 25,482 shares of the company's stock, valued at $2,205,212.28. The trade was a 24.83% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 107,231 shares of company stock worth $9,086,680. Insiders own 11.51% of the company's stock.

Institutional Investors Weigh In On Zoom Communications

Hedge funds have recently modified their holdings of the business. Norges Bank bought a new position in shares of Zoom Communications during the 4th quarter worth approximately $509,788,000. AQR Capital Management LLC raised its stake in shares of Zoom Communications by 43.9% during the 4th quarter. AQR Capital Management LLC now owns 12,195,243 shares of the company's stock worth $1,052,328,000 after acquiring an additional 3,718,186 shares in the last quarter. Two Sigma Investments LP bought a new position in shares of Zoom Communications during the 3rd quarter worth approximately $86,709,000. Vanguard Group Inc. raised its stake in shares of Zoom Communications by 4.0% during the 4th quarter. Vanguard Group Inc. now owns 26,967,224 shares of the company's stock worth $2,327,002,000 after acquiring an additional 1,029,623 shares in the last quarter. Finally, Pacer Advisors Inc. raised its stake in shares of Zoom Communications by 54.4% during the 3rd quarter. Pacer Advisors Inc. now owns 2,695,193 shares of the company's stock worth $222,353,000 after acquiring an additional 949,829 shares in the last quarter. Hedge funds and other institutional investors own 66.54% of the company's stock.

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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