Zoom Communications Stock Drops After Earnings Miss
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 13 2026
0mins
Should l Buy ZM?
Source: Fool
- Earnings Miss: Zoom Communications reported a non-GAAP EPS of $1.44 for Q4, falling short of the $1.49 expected by analysts, leading to a stock drop of up to 15% post-earnings, reflecting market concerns about its financial outlook.
- Competitive Pressure: Despite facing competition from Microsoft Teams, Zoom continues to show steady growth among enterprise customers, particularly large enterprises, highlighting the strength of its network effect in maintaining market position.
- AI Investment: Zoom is heavily investing in generative AI capabilities, with its AI Companion 3.0 designed to extract insights from meetings and assist users with simple tasks, indicating the company's commitment to leveraging AI's potential.
- Strong Cash Flow: By the end of 2025, Zoom had $7.8 billion in cash and securities, and despite the impact of AI spending on earnings, it continues to generate substantial free cash flow, with $1 billion remaining in its stock repurchase authorization, showcasing its financial health.
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Analyst Views on ZM
Wall Street analysts forecast ZM stock price to rise
20 Analyst Rating
12 Buy
7 Hold
1 Sell
Moderate Buy
Current: 76.740
Low
85.00
Averages
99.33
High
115.00
Current: 76.740
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.
Zoom's Stock Price Remains Far from Forecasted Targets
- Price Prediction Review: In June 2022, Cathie Wood's ARK Invest forecasted that Zoom's stock could approach $1,500 by 2026, compounding at a 76% annual growth rate, while the stock was priced at $110.40, indicating extremely high market expectations.
- Valuation Range Analysis: ARK's research outlined a valuation range for Zoom at $2,000 in a bullish scenario and $700 in a bearish one by 2026, highlighting significant uncertainty in market perceptions, with a 25% probability of exceeding $2,000.
- Stock Price Fluctuations: Since ARK's forecast, Zoom's stock briefly peaked at $124.05 on July 8, 2022, but has since declined to approximately $74.11, representing a 32.6% drop from the forecast period, reflecting a lack of market confidence.
- Market Environment Impact: With software stocks continuing to struggle, Zoom would require a substantial market rally to meet Wood's ambitious targets, as the current economic climate and investor sentiment pose challenges to its future performance.
See More
Zoom Communications Stock Drops After Earnings Miss
- Earnings Miss: Zoom Communications reported a non-GAAP EPS of $1.44 for Q4, falling short of the $1.49 expected by analysts, leading to a stock drop of up to 15% post-earnings, reflecting market concerns about its financial outlook.
- Competitive Pressure: Despite facing competition from Microsoft Teams, Zoom continues to show steady growth among enterprise customers, particularly large enterprises, highlighting the strength of its network effect in maintaining market position.
- AI Investment: Zoom is heavily investing in generative AI capabilities, with its AI Companion 3.0 designed to extract insights from meetings and assist users with simple tasks, indicating the company's commitment to leveraging AI's potential.
- Strong Cash Flow: By the end of 2025, Zoom had $7.8 billion in cash and securities, and despite the impact of AI spending on earnings, it continues to generate substantial free cash flow, with $1 billion remaining in its stock repurchase authorization, showcasing its financial health.
See More
Zoom Communications' 2027 Outlook Disappoints Amid SaaS Sell-Off
- Disappointing Financial Outlook: Zoom Communications' fiscal 2027 outlook fell short by approximately 4.5%, leading to a stock price drop of up to 15% following the earnings release, indicating market concerns about its future growth prospects.
- Profitability Pressure: Although Zoom reported a non-GAAP earnings per share of $1.44, slightly below the expected $1.49, its heavy investment in AI capabilities is weighing on earnings, even as revenue continues to rise.
- Strong Cash Flow: By the end of 2025, Zoom had $7.8 billion in cash and securities, generating $1.8 billion in free cash flow for the year, allowing it to repurchase shares while continuing to invest in product innovation, with $1 billion remaining in its current repurchase authorization.
- Competitive Advantage: Despite pressure from competitors like Microsoft Teams, Zoom continues to achieve steady growth among enterprise customers, demonstrating the strength of its network effect and establishing itself as the primary tool for video communication, thereby creating a business moat.
See More
Zoom Unveils AI Companion 3.0 to Enhance Workflow Efficiency
- AI Platform Expansion: Zoom announced the introduction of new workflow orchestration capabilities within its enterprise agentic AI platform, covering Zoom Workplace, Zoom Phone, and Zoom CX, aimed at enhancing organizational efficiency and business outcomes through task automation and cross-system workflow triggers.
- Significant User Growth: The monthly active users of Zoom's AI Companion have more than tripled year-over-year in Q4 FY26, indicating a surge in enterprise demand for AI technology, which further solidifies Zoom's leadership position in the enterprise market.
- Enhanced Customization Capabilities: The newly launched Custom AI Companion allows organizations to build custom AI agents that streamline task automation and workflow orchestration, supporting integration with third-party systems like Salesforce and Slack, thereby improving operational efficiency and data utilization.
- Security Enhancements: Zoom also introduced meeting security enhancements and deepfake risk detection technology that intelligently identifies synthetic audio or video in meetings, ensuring meeting security and further enhancing customer trust and satisfaction.
See More
PCI Pal Expands Strategic Partnership with Zoom for Secure Payments
- Strategic Partnership Expansion: PCI Pal is deepening its strategic relationship with Zoom by planning to embed secure payment technology into Zoom Virtual Agent (ZVA), enabling seamless customer interactions through AI-driven workflows, enhancing customer experience while bolstering compliance.
- Payment Integration Innovation: The new technology will allow customers to complete transactions within the same virtual interaction, eliminating the need for channel switching while maintaining rigorous security standards, thereby reducing compliance complexity and audit burdens, facilitating efficient operations for enterprises.
- Enhanced AI Capabilities: Zoom Virtual Agent resolves customer issues through multi-step workflows and seamlessly hands off to human agents when necessary, aiming to improve issue resolution rates and enhance the coherence of customer relationships to meet growing support demands.
- Market Demand Response: As organizations rapidly adopt virtual agent solutions, PCI Pal's embedded secure payment capability will enable enterprises to confidently expand ZVA deployments, supporting global transaction volumes and operational needs while simplifying deployment processes for mid-market businesses.
See More
FLEX LNG Reports Q4 Earnings Miss, NextEra Energy Upgraded
- FLEX LNG Earnings Report: FLEX LNG reported fourth-quarter earnings of $0.43 per share on February 11, missing the analyst consensus estimate of $0.46, indicating potential pressure on the company's profitability and investor confidence.
- Sales Beat Expectations: Despite the earnings miss, FLEX LNG's quarterly sales reached $87.537 million, surpassing the analyst consensus of $85.460 million, suggesting the company still possesses resilience in sales growth.
- NextEra Energy Upgrade: UBS analyst William Appicelli maintained a Buy rating on NextEra Energy and raised the price target from $91 to $104, reflecting optimistic market sentiment towards the utility stock, which may attract more investor interest.
- Zoom Communications Mixed Results: Zoom Communications posted adjusted earnings of $1.44 per share on February 26, falling short of the $1.49 consensus estimate, although revenue of $1.247 billion slightly exceeded expectations, indicating challenges in profitability that could impact its stock performance.
See More
Zoom's Stock Price Remains Far from Forecasted Targets
- Price Prediction Review: In June 2022, Cathie Wood's ARK Invest forecasted that Zoom's stock could approach $1,500 by 2026, compounding at a 76% annual growth rate, while the stock was priced at $110.40, indicating extremely high market expectations.
- Valuation Range Analysis: ARK's research outlined a valuation range for Zoom at $2,000 in a bullish scenario and $700 in a bearish one by 2026, highlighting significant uncertainty in market perceptions, with a 25% probability of exceeding $2,000.
- Stock Price Fluctuations: Since ARK's forecast, Zoom's stock briefly peaked at $124.05 on July 8, 2022, but has since declined to approximately $74.11, representing a 32.6% drop from the forecast period, reflecting a lack of market confidence.
- Market Environment Impact: With software stocks continuing to struggle, Zoom would require a substantial market rally to meet Wood's ambitious targets, as the current economic climate and investor sentiment pose challenges to its future performance.
See More
Zoom Communications Stock Drops After Earnings Miss
- Earnings Miss: Zoom Communications reported a non-GAAP EPS of $1.44 for Q4, falling short of the $1.49 expected by analysts, leading to a stock drop of up to 15% post-earnings, reflecting market concerns about its financial outlook.
- Competitive Pressure: Despite facing competition from Microsoft Teams, Zoom continues to show steady growth among enterprise customers, particularly large enterprises, highlighting the strength of its network effect in maintaining market position.
- AI Investment: Zoom is heavily investing in generative AI capabilities, with its AI Companion 3.0 designed to extract insights from meetings and assist users with simple tasks, indicating the company's commitment to leveraging AI's potential.
- Strong Cash Flow: By the end of 2025, Zoom had $7.8 billion in cash and securities, and despite the impact of AI spending on earnings, it continues to generate substantial free cash flow, with $1 billion remaining in its stock repurchase authorization, showcasing its financial health.
See More
Zoom Communications' 2027 Outlook Disappoints Amid SaaS Sell-Off
- Disappointing Financial Outlook: Zoom Communications' fiscal 2027 outlook fell short by approximately 4.5%, leading to a stock price drop of up to 15% following the earnings release, indicating market concerns about its future growth prospects.
- Profitability Pressure: Although Zoom reported a non-GAAP earnings per share of $1.44, slightly below the expected $1.49, its heavy investment in AI capabilities is weighing on earnings, even as revenue continues to rise.
- Strong Cash Flow: By the end of 2025, Zoom had $7.8 billion in cash and securities, generating $1.8 billion in free cash flow for the year, allowing it to repurchase shares while continuing to invest in product innovation, with $1 billion remaining in its current repurchase authorization.
- Competitive Advantage: Despite pressure from competitors like Microsoft Teams, Zoom continues to achieve steady growth among enterprise customers, demonstrating the strength of its network effect and establishing itself as the primary tool for video communication, thereby creating a business moat.
See More
Zoom Unveils AI Companion 3.0 to Enhance Workflow Efficiency
- AI Platform Expansion: Zoom announced the introduction of new workflow orchestration capabilities within its enterprise agentic AI platform, covering Zoom Workplace, Zoom Phone, and Zoom CX, aimed at enhancing organizational efficiency and business outcomes through task automation and cross-system workflow triggers.
- Significant User Growth: The monthly active users of Zoom's AI Companion have more than tripled year-over-year in Q4 FY26, indicating a surge in enterprise demand for AI technology, which further solidifies Zoom's leadership position in the enterprise market.
- Enhanced Customization Capabilities: The newly launched Custom AI Companion allows organizations to build custom AI agents that streamline task automation and workflow orchestration, supporting integration with third-party systems like Salesforce and Slack, thereby improving operational efficiency and data utilization.
- Security Enhancements: Zoom also introduced meeting security enhancements and deepfake risk detection technology that intelligently identifies synthetic audio or video in meetings, ensuring meeting security and further enhancing customer trust and satisfaction.
See More
PCI Pal Expands Strategic Partnership with Zoom for Secure Payments
- Strategic Partnership Expansion: PCI Pal is deepening its strategic relationship with Zoom by planning to embed secure payment technology into Zoom Virtual Agent (ZVA), enabling seamless customer interactions through AI-driven workflows, enhancing customer experience while bolstering compliance.
- Payment Integration Innovation: The new technology will allow customers to complete transactions within the same virtual interaction, eliminating the need for channel switching while maintaining rigorous security standards, thereby reducing compliance complexity and audit burdens, facilitating efficient operations for enterprises.
- Enhanced AI Capabilities: Zoom Virtual Agent resolves customer issues through multi-step workflows and seamlessly hands off to human agents when necessary, aiming to improve issue resolution rates and enhance the coherence of customer relationships to meet growing support demands.
- Market Demand Response: As organizations rapidly adopt virtual agent solutions, PCI Pal's embedded secure payment capability will enable enterprises to confidently expand ZVA deployments, supporting global transaction volumes and operational needs while simplifying deployment processes for mid-market businesses.
See More
FLEX LNG Reports Q4 Earnings Miss, NextEra Energy Upgraded
- FLEX LNG Earnings Report: FLEX LNG reported fourth-quarter earnings of $0.43 per share on February 11, missing the analyst consensus estimate of $0.46, indicating potential pressure on the company's profitability and investor confidence.
- Sales Beat Expectations: Despite the earnings miss, FLEX LNG's quarterly sales reached $87.537 million, surpassing the analyst consensus of $85.460 million, suggesting the company still possesses resilience in sales growth.
- NextEra Energy Upgrade: UBS analyst William Appicelli maintained a Buy rating on NextEra Energy and raised the price target from $91 to $104, reflecting optimistic market sentiment towards the utility stock, which may attract more investor interest.
- Zoom Communications Mixed Results: Zoom Communications posted adjusted earnings of $1.44 per share on February 26, falling short of the $1.49 consensus estimate, although revenue of $1.247 billion slightly exceeded expectations, indicating challenges in profitability that could impact its stock performance.
See More
