Zoom loses traction in the stock market despite an upbeat performance report

Despite
topping analysts’ estimates for earnings and revenue, the U.S-based video
communications company, Zoom, was seen trading 10% down on Wednesday following
the release of its quarterly financial results. Part of the loss, however, was
recovered later in after-hours trading.

Zoom
saw a massive growth ascribed to the Coronavirus
outbreak that pushed businesses to resort to remote work. Excluding
Wednesday’s price fluctuations, the video communication company boasted an over
70% growth in the stock market in 2020 so far. At the time of the initial
public offering IPO, the company priced its shares at $62 in April 2019.
Currently, the stock is exchanging hands at around $110 per share.

Zoom’s
Q4 Performance Results Versus Analysts’ Estimates

According
to Refinitiv, analysts were expecting Zoom to print $176.6 million in revenue
in the fourth quarter. In terms of earnings per share (EPS), their estimate was
capped at 7 cents. In its performance report on Wednesday, the company
announced to have generated a much higher $188.3 million in revenue in the
recent quarter while its EPS was recorded twice as high as the expectations at
15 cents.

In
the quarter that ended on 31^st January, Zoom boasted a massive 78%
increase in its revenue on an annualized basis. In the previous quarter, the annualized
growth in its revenue was noted at an even higher 85%.

The
company also said that it had a total of 641 customers at the end of the recent
quarter which according to Zoom, paid more than $100,000 to the company. This
marked a sharp 86% growth on a year over year basis. The aforementioned growth
rate, however, printed at an even higher 97% in the third quarter.

Zoom’s
Guidance For The Fiscal First Quarter

The
total count of customers in the fourth quarter came out at 81,900 on an employee
count of 10 that translated to a 61% increase year over year. In Q3, a greater
67% increase was registered on this front.

In its guidance for the fiscal first quarter, Zoom said that it now expects to generate $199 million to $201 million in the current quarter and make 10 cents of earnings per share. Hitting the aforementioned target will imply a 64% growth in its quarterly revenue.

Analysts have forecast $185.7 million in revenue for Zoom in Q1 while their estimate for EPS was reported at 6 cents. Zoom also forecast 42 cents to 45 cents of adjusted earnings per share in fiscal 2021 on revenue of $905 – $915 million (79% growth). Experts estimate its 2021 revenue at $868.4 million and its EPS at 30 cents.