Why Zoom Video's Incredible Third Quarter Might Not Be Enough For Investors

Zoom Video Communications, Inc. (NASDAQ: ZM) 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.

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.