Zoom video communication
Shares returned its initial earnings following the earnings report that exploded in the last quarter of January, amid ongoing concern both about the valuation and in terms of the company’s growth rate.
Main earnings from home and home-learning trends During the Covid-19 epidemic, Zoom reported quarterly revenue of $ 882.5 million, up 369% from a year earlier, with adjusted earnings of $ 365.4 million, or $ 1.22 per share.
The stock has risen up to 10% in after-hours trading on Monday, opening sharper on Tuesday. However, profits declined despite generally optimal street interpretations. The stock, which traded at $ 440 earlier during Tuesday’s session, fell 5.5% to $ 387.02 in the most recent trading session.
The decline may be for two reasons. One, it seems that the incredible string of quarters of triple-digit growth is coming to an end, as it now faces inflated comparisons in Cubid from year to year. And two, even after falling from previous highs, the stock continues to trade at high multipliers of sales and earnings.
JPMorgan analyst Sterling Oti reiterated its neutral rating in Zoom on Tuesday and raised its price target to $ 456 from $ 450, but warns in the post-earnings study note that this could be the “latest glorification” led by Covid’s miraculous The company. run.
“In the quarter of April begin the entry for tougher comparisons and thus investors will continue to discuss what the appropriate post-epidemic growth rate will look like for a zoom at this scale,” he writes. “There are still a huge amount of growth opportunities in the market in both the international segments and the Zoom Phone sectors, but the question will be the pace and pace of post-epidemic adoption.”
Zoom expects earnings of $ 900 to $ 905 million for the April quarter, with non-GAAP earnings of 95 to 97 cents per share. The street estimated revenue of $ 804.8 billion and non-GAAP earnings of 72 cents a share.
Otti also sees a risk in the fact that accounts under the age of 10 employees accounted for 37% of revenue. “We believe that this customer base may pose a higher risk to later propensity rates, given that it is likely to be affected if a vaccine becomes widely available,” he writes.
City’s Tyler Radka lifted stock coverage on Tuesday with a neutral rating and a $ 501 target price. “While the annual guidelines were ahead of expectations … we fear that the significant slowdown in growth throughout the year may weigh on the stock, especially when the motives for new product growth are still too small to move the needle,” he writes in a research note.
In the fiscal year of January 2022, Zoom expects revenue of $ 3.76 billion to $ 3.78 billion, an increase of 42% over the previous year in the mid-term, with non-GAAP earnings of $ 3.59 to $ 3.65 per share. Prior to that, the street announced fiscal year January 2022 revenue of $ 3.52 billion with non-GAAP earnings of $ 2.96 per share.
Radek’s interpretation of this year’s guidelines is that growth will fall from about 175% in the April quarter to the lower youth in the second half amid very difficult comparisons.
Piper Sandler analyst James Fish, on the other hand, responded to the earnings report and raised his rating to overweight from neutral, with a new price target of $ 541, compared to $ 501. “In the past the high valuation and exposure to commercial customers who pay monthly has left us on the margins,” he writes in a research note. “While the quarter itself did not address the latter concern, the leading indices point to greater exposure to corporate and annual / multi-year customers with a digestible valuation given visibility.”
Oppenheimer’s analyst Itai Kidron has liked the quarter, and he sees opportunities for the company to expand its scope to new areas. “Zoom continues to show how critical it is in the digital world; we believe its relevance will remain high after Cubid 19,” he writes. But the stock valuation – according to the 2022 sales valuation – gives it a break and it maintains its Perform rating.
Write to Eric J. Savitz at [email protected]