Shares of Zoom Video Communications (ZM) gained in after-hours trading after the video communications platform reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at $1.39, which beat analysts’ consensus estimate of $1.21 per share. Interestingly, ZM has beaten expectations every quarter since November 2020.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Meanwhile, sales increased by 1.8% year-over-year, with revenue hitting $1.16 billion. This also beat analysts’ expectations by $10 million. What’s interesting about the results is that the company saw growth despite a 29.45% drop in website traffic when compared to the same quarter last year. This suggests that Zoom is doing a better job of monetizing the visitors it receives.
Looking forward, management now expects revenue and adjusted earnings per share for Q3 2025 to be in the ranges of $1.16 billion to $1.165 billion and $1.29 to $1.31, respectively. For reference, analysts were expecting $1.158 billion in revenue along with an adjusted EPS of $1.24.
Is Zoom a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on ZM stock based on five Buys, 15 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 10% decline in its share price over the past year, the average ZM price target of $73.19 per share implies 22.86% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
