Zoom's stock declines as it hits a 20-day low amid market conditions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 14 2024
0mins
Should l Buy ZM?
Source: SeekingAlpha
Zoom Communications Inc's stock price fell by 4.06% during regular trading, hitting a 20-day low. This decline occurs amid mixed market conditions, with the Nasdaq-100 down 0.25% while the S&P 500 saw a slight increase of 0.03%.
The drop in Zoom's stock price can be attributed to broad market weakness, as the overall market sentiment has shifted, impacting investor confidence despite the company's strong cash flow and profitability improvements. The stock's recent performance reflects a sector rotation, as investors are reallocating their focus in response to changing market dynamics.
Investors may need to consider the implications of this price movement, particularly as Zoom continues to transition to a high-margin enterprise software platform. The company's strong cash flow and ongoing product diversification efforts could provide a foundation for future growth, but current market conditions may pose challenges.
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Analyst Views on ZM
Wall Street analysts forecast ZM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ZM is 99.33 USD with a low forecast of 85.00 USD and a high forecast of 115.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
12 Buy
7 Hold
1 Sell
Moderate Buy
Current: 89.080
Low
85.00
Averages
99.33
High
115.00
Current: 89.080
Low
85.00
Averages
99.33
High
115.00
About ZM
Zoom Communications, Inc. provides an artificial intelligence (AI) work platform for human connection. Zoom Workplace, the Company’s AI-powered, open collaboration platform built for modern work, enables us to streamline communications, increase employee engagement, optimize in-person time, improve productivity, and offer customer choice with third-party apps and integrations. Zoom Workplace, powered by Zoom AI Companion, includes collaboration solutions like meetings, team chat, phone, scheduler, whiteboard, spaces, Workvivo, and more. Its communication products include Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom scheduler, and Zoom mail and calendar. Its productivity products include Zoom Docs, Zoom Whiteboard, Zoom Clips, and Zoom Tasks. Its space products include Zoom Rooms, Zoom Workspace Reservation, and Zoom Visitor Management. It serves various industries, including education, financial services, government, retail, manufacturing and healthcare.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Product Competitiveness: Figma's platform effectively bridges designers and developers, with 30% of high-value customers using its AI tool Figma Make weekly, underscoring the product's significance in the industry and customer retention, which may further enhance market share in the future.
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- Digital Sovereignty Push: Tuttle highlights a significant move towards digital sovereignty in Europe, ensuring that core systems and communications cannot be easily disabled if relations with the U.S. deteriorate, which will impact future technology procurement and investment decisions.
- Beneficiary Companies: He identifies several European companies, including OVH Groupe, IONOS, Orange, Deutsche Telekom, and Capgemini, that could benefit from this shift, indicating a market tilt towards local technology solutions.
- Strained U.S.-EU Relations: Relations between the U.S. and EU have further strained after President Trump threatened tariffs on the EU for not supporting his Greenland acquisition bid, which may intensify scrutiny on U.S. tech companies and affect investor confidence.
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- Earnings Performance: Although the EPS of $2.79 fell short of the $3.18 estimate, the diluted GAAP EPS surged from $1.73 a year ago to $13.39, reflecting a significant improvement in the company's profitability.
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