Can Zoom Video Run Even More After Earnings?

Technology

Published: March 5, 2020 10:00 am

When Zoom Video Communications Inc. (NASDAQ: ZM) released its fiscal fourth-quarter financial results after the markets closed on Wednesday, the firm said that it had $0.15 in earnings per share (EPS) and $188.3 million in revenue. The consensus estimates had called for $0.07 in EPS and $176.55 million in revenue. In the same period of last year, it said it had $0.04 in EPS and $105.8 million in revenue.

At the end of the latest quarter, Zoom had roughly 81.900 customers, or about 61% more than in the same quarter last year.

The firm also boasted 641 customers contributing more than $100,000 in trailing 12 months revenue, up 86% from the same quarter last year.

Looking ahead to the fiscal first quarter, the company expects to see EPS of $0.10 and revenue between $199 million and $201 million. Consensus estimates call for $0.06 in EPS and $185.68 million in revenue for the quarter.

Eric S. Yuan, president and CEO of Zoom, commented:

We strive to empower our customers to accomplish more with our video-first unified communications platform. This is evidenced by our strong performance in the fourth quarter as we delivered a unique combination of high total revenue growth of 78% at a scale of $188 million, GAAP income from operations of $11 million, non-GAAP income from operations of $38 million, and operating cash flow of $37 million. Our execution also drove 61% growth in the number of customers with more than 10 employees and 86% growth in the number of customers contributing more than $100K of TTM revenue.

Zoom Video Communications stock traded up about 2.5% at $119.70 early Thursday, in a post-IPO range of $59.94 to $122.96. The consensus price target is down at $84.94.

It’s worth pointing out that this has been one of the staple stocks in the fight against the coronavirus, considering the video conferencing service it offers. In reaction to this, investors have sent shares up over 71% year to date. So even with this incredible earnings beat, the stock has run so much already that the numbers would have to be even better than this to make a real difference to investors, with the valuation as pumped up as it is.