Zoom stock price on the back foot ahead of Q4 earnings
Zoom had a spectacular 2020, but as the focus moves towards reopening the economy can it find new ways to prosper?
When is Zoom’s earnings date?
Zoom reports earnings on 1 March, covering its financial fourth quarter (Q4).
Zoom earnings – what does Wall Street expect?
Zoom is expected to report earnings of 78.9 cents per share, up 425% from last year, with revenue 330% higher at $811 million. At a price-earnings (PE) ratio of 256 times trailing earnings, and 124 times forward earnings, the stock has little room for disappointment.
Rarely if ever has a company entered the international lexicon so quickly, but the lockdowns of 2020 meant that Zoom calls became a feature for a significant portion of the globe. Suddenly a company few had heard of became a global icon, surpassing Skype which had been around for many years. Having rallied 300% since 1 March 2020 investors may wonder how the company can keep the ebullient atmosphere going.
As the world returns to normal, many meetings and chats will go back to being in person rather than online, reducing demand. But it must be said that with many office workers planning to work remotely much more than before the pandemic, there will at least be continued scope for growth. How well the stock does around earnings, and beyond, will depend on Zoom’s outlook. Unlike most companies, it had a very good 2020, but keeping up that mood into 2021 will be tough.
How to trade Zoom earnings
Zoom’s average move on results day is 15.2%, as befits a high-valuation, high-growth firm such as this. Current pricing points towards a move of 12.2%. Meanwhile, of 29 analysts covering the stock, 11 have ‘buys’, with 15 ‘holds’ and just three ‘sells’.
Zoom stock price – technical analysis
Like many tech stocks, Zoom has actually had a tough few months in terms of its stock price, which has declined since its peak last year. It started the year on a weak note and managed to rally by mid-February, but it formed a lower high at $450.00 before falling back to the 200-day simple moving average (SMA) for the second time in two months.
A break above trendline resistance and above the February high would mark a more bullish development, and potentially put a move back towards all-time highs into view. Alternately, the loss of the 200-day would be a bearish development, with a drop through the $317.50 swing low marking a regime shift towards at least a medium-term retracement.
After the Zoom higher, what next?
Remote working will stay in demand for the time being, but Zoom’s valuation means it has to keep up the compelling narrative. As the market regime shifts from tech stocks towards those focused on reopening the economy Zoom will need to highlight its adaptability in the a new world that looks a lot like pre-2020.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
