Zoom Beats 2022 Third Quarter Estimates, Lifts FY 2022 View

Zoom Beats 2022 Third Quarter Estimates, Lifts FY 2022 View
November 24, 2021

Video Source: Bloomberg Technology on YouTube

 

Zoom Video Communications Inc (Nasdaq: ZM) reported better-than-anticipated fiscal 2022 third-quarter revenues and earnings. Furthermore, the company also upwardly revised its FY 2022 outlook. However, the stock lost 14.71% or $35.64 to end Tuesday’s trading session at $206.64 as the online chat solutions provider is facing a slowdown in growth due to the return of the labor force to offices.

The San Jose, California-based company reported third-quarter revenues of $1.051 billion, an increase of 35% from $777.20 million in the similar period last year. Analysts surveyed by Thomson Reuters had anticipated the company to report revenues of $1.02 billion.

For the quarter ending October 31st, 2021, the telecommuting platform provider posted a net income of $340.27 million, or $1.11 per share, compared with $198.44 million, or $0.66 a share in the quarter ending October 31st, 2020.

Excluding stock-based compensation expense and related payroll taxes, and acquisition-related expenses, among others, the Q3 2022 non-GAAP net income was $338.383 million, or $1.11 per share, up from $297.171 million, or $0.99 a share, in Q3 2021. Analysts polled by Thomson Reuters had anticipated the company to report earnings of $1.09 a share.

At the end of Q3 2022, the company had 2,507 clients paying over $100,000 per year (trailing twelve months), an increase of 94% on a y-o-y basis. Furthermore, Zoom had roughly 512,100 clients with over ten employees, reflecting a rise of roughly 18% from last year, but missed the Bloomberg estimate of 516,174.

At the end of October 31st, 2021, the company had cash, cash equivalents, and marketable securities worth $5.40 billion. Net cash provided by operating activities declined to $394.60 million in the recent quarter, compared with $411.50 million in the third quarter last year. Free cash flow was $374.80 million in Q3 2022, down from $388.20 million in Q3 2021.

Looking ahead, for Q4 2022, the company anticipates non-GAAP income from operations to be between $361 million and $363 million. Non-GAAP earnings are expected to be in the range of $1.06 to $1.07 per share. Total revenue is forecast to be between $1.051 billion and $1.053 billion. Analysts forecast Zoom to post earnings of $1.05 per share on revenues of $1.02 billion for Q4 2022.

Furthermore, Zoom anticipates FY 2022 non-GAAP income from operations to be between $1.598 billion and $1.600 billion. Also, non-GAAP earnings are projected in the range of $4.84 to $4.85 per share. Total revenue is anticipated to be in the range of $4.079 billion to $4.081 billion, reflecting growth of roughly 54% on a y-o-y basis. Analysts anticipate the company to post earnings per share of $4.78 on revenues of $4.02 billion for FY 2022.

The quarterly beat, an upward revision of FY 2022 guidance, and a slowdown in growth are expected to keep the stock range-bound in the near term.

The historical price chart indicates that the stock is declining after facing a big sell-off at 425 levels. The next major support is anticipated only near 160. Additionally, the stock is trading below its 50-day moving average while the MACD indicator has a negative reading. Therefore, we are anticipating the stock to remain in a downtrend in the short term.

zm - technical analysis - 24 November 2021

Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.

Andrew Wright

Prior to founding tradersasset.com in 2014, Andrew worked as a proprietary trader, then as a market maker. As a market maker, he traded options in over 100 stocks, he then began trading currency pairs in 2013. Andrew still actively trades both, and prides himself on educating and informing traders on the benefits of both Binary Options and Forex.


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