Zoom Video Stock Is Sliding: What's Going On?

Zoom Video Communications Inc ZM shares are trading lower Tuesday after the company reported first-quarter financial results. 

What Happened: Zoom said first-quarter revenue increased 3% year-over-year to $1.11 billion, which beat average estimates of $1.08 billion, according to Benzinga Pro. The company reported quarterly adjusted earnings of $1.16 per share, which beat estimates of 99 cents per share. 

Zoom said it had 3,580 customers contributing more than $100,000 in trailing 12 months revenue at the end of the quarter, up 23% year-over-year.

"Our customers see Zoom as mission-critical in how they collaborate internally and externally across the globe," said Eric Yuan, founder and CEO of Zoom.

"This relationship with our customers helped us to exceed our guidance due to Enterprise growth and stabilizing Online revenue while driving greater efficiencies in our business to deliver strong profitability and free cash flow margin."

Zoom expects second-quarter revenue to be between $1.11 billion and $1.115 billion versus estimates of $1.11 billion. Full-year revenue is expected to be between $4.465 billion and $4.485 billion versus estimates of $4.45 billion

Zoom sees second-quarter adjusted earnings in a range of $1.04 to $1.06 per share versus estimates of $1.05 per share. Full-year earnings are expected to be between $4.25 and $4.31 per share versus estimates of $4.22 per share. 

Zoom's guidance shows that growth is expected to continue to slow from its pandemic peak, which could be weighing on shares. 

Related Link: Zoom Q1 Earnings Highlights: Revenue And EPS Beat, Raised Guidance, Enterprise Growth And More

Analyst Changes: 

• MoffettNathanson analyst Sterling Auty upgraded Zoom from Underperform to Market Perform and announced an $85 price target.
• Rosenblatt analyst Catharine Trebnick reiterated Zoom with a Neutral and maintained a $75 price target.
• Credit Suisse analyst Fred Lee reiterated Zoom with a Neutral and maintained an $83 price target.

ZM Price Action: Zoom shares were down 3.09% at $69.20 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Zoom.