Zoom Q4 results: ‘they’re hitting a bump in terms of COVID rolling off

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Zoom Video Communications Inc (NASDAQ: ZM) expects growth to slow down this year. The stock first slid 10% after-hours but then recovered almost completely as shareholders focused on better-than-expected results for Q4.

Important points in Zoom Q4 results

Net earnings printed at $490.5 million that translates to $1.60 per share.
In the same quarter of last year, net earnings were $260.4 million or 87 cents a share.
Adjusted EPS came in at $1.29 versus $1.07 expected, as per the earnings press release.
At $1.07 billion, sales jumped 21% YoY beating FactSet consensus for $1.05 billion.
Customers contributing over $100,000 in revenue in the trailing 12 months were 2,725.
Zoom had 9.0% more customers with over 10 employees on a year-over-year basis.

Analyst reacts to dovish guidance

For the full financial year, Zoom forecasts its revenue to fall between $4.53 billion and $4.55 billion on up to $3.51 in adjusted EPS – only a moderate increase from its fiscal 2022 results. FactSet consensus was for $4.36 in adjusted per-share earnings and $4.71 billion in sales.

Its Q1 guidance was also below expectations. On CNBC’s “Closing Bell”, Benchmark’s Matt Harrigan said:

I’m not surprised on disappointing EPS guidance because they’re investing heavily in areas like R&D. They’re trying to become more of a platform company. I respect the management, they’re very innovative. But the revenue guidance was disappointing. They’re clearly hitting a bump in terms of COVID rolling off. Their investment initiatives will take a while to get the benefits.

Zoom is now a $130 stock versus $560 in October 2020 when the pandemic was at its peak. Last week, CICC rated Zoom at “outperform” with a price target of $183 that represents a 40% upside from here.

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