Zoom Communications (NASDAQ:ZM) Shares Gap Up on Earnings Beat

Zoom Communications, Inc. (NASDAQ:ZM) gapped up before the market opened on Tuesday following a stronger than expected earnings report. The stock had previously closed at $78.60, but opened at $83.60. Zoom Communications shares last traded at $86.4710, with a volume of 2,104,099 shares trading hands.

The company reported $1.52 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.44 by $0.08. Zoom Communications had a net margin of 24.99% and a return on equity of 11.91%. The business had revenue of $1.23 billion during the quarter, compared to analysts’ expectations of $1.21 billion. During the same quarter in the prior year, the business posted $1.38 EPS. The company’s revenue for the quarter was up 4.4% on a year-over-year basis. Zoom Communications has set its FY 2026 guidance at 5.950-5.970 EPS. Q4 2026 guidance at 1.480-1.490 EPS.

Analyst Upgrades and Downgrades

A number of brokerages recently issued reports on ZM. Morgan Stanley set a $92.00 target price on Zoom Communications in a research report on Tuesday. Wedbush restated an “outperform” rating and set a $95.00 target price on shares of Zoom Communications in a research report on Tuesday. Piper Sandler reiterated a “neutral” rating and issued a $85.00 price target on shares of Zoom Communications in a research report on Friday, August 22nd. Jefferies Financial Group restated a “buy” rating and issued a $105.00 price objective on shares of Zoom Communications in a research note on Tuesday. Finally, Wall Street Zen downgraded shares of Zoom Communications from a “strong-buy” rating to a “buy” rating in a research note on Saturday, November 15th. One equities research analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating, sixteen have assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the company currently has an average rating of “Hold” and an average price target of $92.91.

Insider Transactions at Zoom Communications

In other Zoom Communications news, CFO Michelle Chang sold 33,956 shares of Zoom Communications stock in a transaction that occurred on Friday, October 10th. The stock was sold at an average price of $82.00, for a total value of $2,784,392.00. Following the sale, the chief financial officer owned 20,539 shares of the company’s stock, valued at approximately $1,684,198. The trade was a 62.31% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Santiago Subotovsky sold 2,475 shares of the stock in a transaction that occurred on Tuesday, November 4th. The stock was sold at an average price of $84.15, for a total value of $208,271.25. Following the transaction, the director directly owned 150,169 shares of the company’s stock, valued at approximately $12,636,721.35. This trade represents a 1.62% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 389,373 shares of company stock valued at $32,311,579 over the last 90 days. Insiders own 10.78% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. SouthState Corp purchased a new position in shares of Zoom Communications in the first quarter valued at $25,000. Elevation Point Wealth Partners LLC acquired a new stake in shares of Zoom Communications in the second quarter valued at approximately $27,000. REAP Financial Group LLC increased its stake in shares of Zoom Communications by 181.7% during the 2nd quarter. REAP Financial Group LLC now owns 355 shares of the company’s stock worth $28,000 after purchasing an additional 229 shares in the last quarter. GKV Capital Management Co. Inc. acquired a new position in shares of Zoom Communications during the 1st quarter worth approximately $31,000. Finally, FNY Investment Advisers LLC purchased a new stake in Zoom Communications in the 2nd quarter valued at approximately $31,000. 66.54% of the stock is currently owned by institutional investors and hedge funds.

Zoom Communications Stock Performance

The business has a fifty day simple moving average of $82.59 and a 200 day simple moving average of $79.66. The stock has a market cap of $26.34 billion, a price-to-earnings ratio of 22.86, a PEG ratio of 10.73 and a beta of 0.79.

About Zoom Communications

Zoom Video Communications, Inc provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, an enterprise cloud phone system; and Zoom Chat enables users to share messages, images, audio files, and content in desktop, laptop, tablet, and mobile devices.