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What to Expect from Zoom Video’s Q1 Earnings

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On May 29, Zoom Video (NASDAQ:ZM) stock rose 9.7% and closed at $179.48. The stock was trading 1.1% below its 52-week high of $181.50. Meanwhile, the stock was trading 194.4% above its 52-week low of $60.97. At the closing price on May 29, Zoom Video stock had a market capitalization of $50.6 billion.

What can investors expect from Zoom Video’s results for the first quarter of fiscal 2021? The company will likely release its earnings results for the April ended quarter on Tuesday after the closing bell.

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Zoom Video’s Q1 earnings expectations

Wall Street analysts expect Zoom Video to post sales of $202.5 million in the first quarter—a rise of 66% YoY (year-over-year) compared to $122 million in the first quarter of fiscal 2020. Also, analysts expect the company to post an adjusted EPS of $0.09 in the first quarter compared to $0.03 in the first quarter of 2020.

In the first quarter, Zoom Video’s free cash flow will likely increase to $44.5 million from $15.3 million a year ago. The company’s operating cash flow could rise 200% YoY to $67 million. Meanwhile, the company’s capex will likely rise 74% YoY to $12 million in the first quarter.

Analysts also expect Zoom Video’s revenues to rise 50% YoY in fiscal 2021 to $934 million. The sales will likely rise by 33% YoY in fiscal 2022 to $1.24 billion. The adjusted earnings could rise 27% YoY in fiscal 2021 to $0.45 per share. However, the profits will likely rise 38% YoY to $0.62 per share in fiscal 2022.

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Analysts’ recommendations for Zoom Video

Among the 28 analysts following Zoom Video stock, nine recommend a “buy,” 15 recommend a “hold,” and four recommend a “sell.” Wall Street analysts’ mean target price on the stock is $132.07, which implies a 26.4% loss from the current level of $179.48. The consensus target price for the stock has risen from $121.43 a month earlier—a growth of 8.8%.

Technical analysis

Based on the closing price on May 29, Zoom Video stock was trading 10.3% above its 20-day moving average of $162.65. The stock is also trading 19.7% above its 50-day moving average of $149.98 and 47.9% above its 100-day moving average of $121.34. Zoom Video’s 14-day relative strength index score is 62. The score indicates that the stock isn’t overbought or oversold.

The stock has a middle Bollinger Band level of $162.65, while its lower Bollinger Band level is $140.45. On May 29, Zoom Video stock closed near its upper Bollinger Band level of $184.84, which indicates that it’s overbought.

According to a CNBC report, Jim Cramer said, “The expectations going into the quarter are pretty high and you should think of Zoom as a market cap story, not an earnings story.” He added, “With that rapidly growing user base, soon to be improved by 5G, I’m betting this company is worth more than the current $50 billion valuation.”

At 7:21 AM ET today, the S&P 500 futures rose 0.02%, while the Dow futures rose 0.12%. Read Is US Unemployment Another Shock for SPY? to learn more.

Stay tuned to learn how Zoom Video performed in the first quarter of fiscal 2021.

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