CFRA analyst says “M&A is a strong possibility for Zoom” after a solid Q2

Zoom Video Communications Inc (NASDAQ: ZM) jumped nearly 5.0% in extended hours after reporting better-than-expected results for its fiscal second quarter.

Zoom stock up on strong guidance

Shareholders are also cheering the company’s strong guidance for the full year.

Zoom now forecasts its per-share earnings to fall between $4.63 and $4.67 on an adjusted basis. In comparison, analysts had called for $4.32 a share of earnings in fiscal 2024. On CNBC’s “Closing Bell Overtime”, CFRA analyst Keith Snyder said today:

The communications technology company expects about $4.5 billion in revenue this year – roughly in line with Street estimates.

Notable figures in Zoom Q2 earnings release

• Earned $182 million versus the year-ago $45.8 million
• Per-share earnings also climbed from 15 cents to 59 cents
• Adjusted EPS printed at $1.34 as per the press release
• Revenue went up 13% year-on-year to $1.14 billion
• Consensus was $1.06 a share on $1.11 billion revenue

Shares of the California-based company are up only 5.0% year-to-date at writing. According to the CFRA analyst:

Should you buy Zoom stock here?

Zoom saw 3,672 of its customers bring in over $100,000 in revenue over the past twelve months. It ended the second quarter with 218,100 enterprise customers – up 1.0% versus last year. CFRA’s Snyder added:

Nonetheless, he maintained his “hold” rating on the Nasdaq-listed firm on Monday. His $75 price target suggests a near 10% upside from here.