Why Zoom Video’s Incredible Third Quarter Might Not Be Enough For Investors
Zoom's numbers this quarter were incredible but after a few back-to-back-to-back quarters of earthshattering numbers, investors may be facing buyers fatigue.
Zoom Video Communications, Inc. (NASDAQ: ZM | ZM Price Prediction) reported its most recent quarterly results after the markets closed on Monday. The firm said that it had $0.99 in earnings per share (EPS) and $777.2 million in revenue, versus consensus estimates that called for $0.76 in EPS on $693.95 million in revenue. The third quarter from last year had $0.09 in EPS and $166.59 million in revenue.
The numbers this quarter were incredible but after a few back-to-back-to-back quarters of earth-shattering numbers, investors may be facing buyers fatigue. Even though Zoom crushed the numbers on both the top- and bottom-line, investors sent shares lower after the closing bell.
For some highlights from the quarter, revenues increased 367% year over year. Also, Zoom had roughly 433,700 customers, or about 485% more than in the same quarter last year.
The firm also boasted 1,289 customers contributing more than $100,000 in trailing 12 months revenue, up 136% from the same quarter last year.
On the books, cash, cash equivalents, and marketable securities totaled $1.9 billion at the end of the quarter.
Net cash provided by operating activities was $411.5 million for the quarter, compared to $61.9 million in the same period last year. At the same time, free cash flow was $388.2 million, versus $54.7 million.
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Looking ahead to the fiscal fourth quarter, the company expects to see EPS in the range of $0.77 to $0.79 and revenue between $806.0 million and $811.0 million. Consensus estimates call for $0.66 in EPS and $730.11 million in revenue for the quarter.
Zoom Video stock closed Monday at $478.36, with a 52-week range of $62.02 to $588.84. The consensus analyst price target is $474.85. Following the announcement, the stock was initially down 5% at $455.00 in the after-hours session.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
