What's Going On With Zoom Communications Stock Tuesday?

Zoom Video Communications Inc ZM shares are trading lower on the heels of the company’s third-quarter financial results. The stock is off the lows of the session as analysts lift price targets following the print. Here’s what you need to know.

• Q3 Revenue: $1.18 billion, versus estimates of $1.16 billion

• Q3 EPS: $1.38, versus estimates of $1.31

Total revenue was up 3.6% on a year-over-year basis. Enterprise revenue was up 5.8% year-over-year, while online revenue was flat year-over-year. Zoom, which changed its name from Zoom Video Communications to Zoom Communications on Monday, ended the quarter with approximately 192,400 enterprise customers. Online monthly average churn reached an all-time low of 2.7% in the quarter.

“This change reflects our evolution into an AI-first work platform for human connection and our vision for long-term growth,” founder and CEO Eric Yuan said on a conference call.

Outlook: Zoom expects fiscal fourth-quarter revenue to be in the range of $1.175 billion to $1.18 billion versus estimates of $1.17 billion. The company sees fourth-quarter adjusted earnings of $1.29 to $1.30 per share versus estimates of $1.28 per share. 

Zoom expects full-year revenue of $4.656 billion to $4.661 billion versus estimates of $4.64 billion. Full-year earnings are expected to be between $5.41 and $5.43 per share versus estimates of $5.35 per share.

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Analyst Changes:

• Piper Sandler analyst James Fish maintained Zoom with a Neutral and raised the price target from $68 to $89.

• JMP Securities analyst Patrick Walravens maintained Zoom with a Market Perform rating.

• Wells Fargo analyst Michael Turrin maintained Zoom with an Underweight and raised the price target from $60 to $70.

• Stifel analyst Parker Lane maintains Zoom with a Hold and raised the price target from $70 to $90.

ZM Price Action: Zoom shares traded down to around $79 before paring some losses. The stock was down 7.6% at $82.27 at the time of publication Tuesday, according to Benzinga Pro.

Photo: courtesy of Zoom.