Why Zoom Video Stock Is Falling Today

Zoom Video Communications Inc ZM shares are trading lower Tuesday after the company reported weak top-line results and issued guidance below analyst estimates.

Zoom said second-quarter revenue increased 8% year-over-year to $1.1 billion, which missed average analyst estimates of $1.12 billion, according to Benzinga Pro. The company reported quarterly earnings of $1.05 per share, which beat average analyst estimates of 93 cents per share.

"While we saw continued momentum with our Enterprise customers and our non-GAAP operating income came in meaningfully higher than our outlook, our revenue was impacted by the strengthening of the U.S. dollar, performance of the online business, and to a lesser extent sales weighted to the backend of the quarter," said Kelly Steckelberg, CFO of Zoom.

Zoom expects third-quarter revenue to be between $1.095 billion and $1.1 billion versus the estimate of $1.15 billion. The company expects full-year revenue to be between $4.385 billion and $4.395 billion versus the estimate of $4.54 billion. 

Related Link: Zoom Video Investors Pull Back On Q2 Earnings: EPS Beat, Revenue Miss, Guidance Update And More

Analyst Assessment:

• BTIG analyst Matthew Vliet downgraded Zoom from Buy to Neutral.
• Citigroup analyst Tyler Radke maintained Zoom with a Sell and lowered the price target from $91 to $76.
• Piper Sandler analyst James Fish maintained Zoom with a Neutral and lowered the price target from $115 to $91.
• RBC Capital analyst Rishi Jaluria maintained Zoom with an Outperform and lowered the price target from $150 to $130.
• Goldman Sachs analyst Kash Rangan maintained Zoom with a Neutral and lowered the price target from $142 to $122.
• Wells Fargo analyst Michael Turrin maintained Zoom with an Equal-Weight and lowered the price target from $105 to $95.
• Morgan Stanley analyst Meta Marshall maintained Zoom with an Overweight and lowered the price target from $140 to $130.

ZM Price Action: Zoom has a 52-week high of $184.91 and a 52-week low of $79.03.

The stock was down 11% at $86.73 at time of publication.

Photo: courtesy of Zoom.