Zoom Shares Are Trading Higher: What's Going On?

Shares of communications platform company Zoom Video Communications Inc ZM are trading higher Tuesday after the company reported better-than-expected results and issued strong earnings guidance. Multiple analysts have issued updates in the wake of the company's results.

• Q4 Revenue: $1.12 billion beat estimates of $1.1 billion
• Q4 EPS: $1.22 beat estimates of $0.80

Net cash provided by operating activities totaled $211.6 million in the fourth quarter, while free cash flow came in at $183.3 million.

Zoom ended the quarter with cash, equivalents and marketable securities of $5.41 billion.

"Zoom One adoption continued to accelerate and helped drive Zoom Phone to grow more than 100% year over year, surpassing 5.5 million seats in Q4," said Eric Yuan, founder and CEO of Zoom.

"While the macroeconomic situation continues to negatively impact our overall growth, we have maintained a healthy balance sheet and operating cash flow generation."

Zoom sees first-quarter revenue between $1.08 billion and $1.085 billion versus estimates of $1.11 billion. First-quarter earnings are expected to be in a range of 96 cents to 98 cents per share versus the estimates of 84 cents per share.

Zoom expects full-year revenue to be between $4.435 billion and $4.455 billion versus estimates of $4.6 billion. The company expects full-year earnings to be between $4.11 and $4.18 per share versus estimates of $3.65 per share. 

See Also: Trading Strategies for Zoom Communications Stock After Q4 Earnings

Analyst Assessment:

• Mizuho analyst Siti Panigrahi reiterated Zoom with a Buy and maintained a $100 price target.
• Piper Sandler analyst James Fish maintained Zoom with a Neutral and raised the price target from $75 to $78.
• Credit Suisse analyst Fred Lee reiterated Zoom with a Neutral and maintained $83 price target.

ZM Price Action: Zoom has a 52-week high of $136 and a 52-week low of $63.55.

Zoom shares are up 4.79% at $77.25 Tuesday morning, according to Benzinga Pro.

Photo: courtesy of Zoom.