The stock of Zoom Communications (ZM) is down about 2% after the videoconference company reported mixed fourth-quarter 2024 financial results and offered guidance that disappointed Wall Street.
Silicon Valley-based Zoom reported fourth-quarter earnings per share (EPS) of $1.41, which was ahead of the consensus analyst estimate of $1.30. However, revenue of $1.18 billion only matched the forecast issued on Wall Street.
In terms of forward guidance, Zoom Communications said that it expects EPS of $1.29 to $1.31 for the current first quarter of 2025. The midpoint of that range ($1.30) was below consensus expectations that called for $1.31 in Q1 2025 earnings. Zoom also foresees revenue of $1.162 billion to 1.167 billion, which is below estimates that called for $1.175 billion.
Struggling Stock
For all of this year, Zoom forecast EPS of $5.34 to $5.37, which was below the $5.45 expected on Wall Street. Revenue this year of $4.785 billion to $4.795 billion is slightly ahead of consensus estimates of $4.661 billion in sales.
Zoom stock soared during the Covid-19 pandemic when its videoconference platform was in high demand. However, ZM stock has fallen sharply since its pandemic peak. Going into the Q4 2024 print, ZM stock was down more than 85% from its all-time closing high of $568.34 reached in October 2020.
Zoom is currently focusing on investing in artificial intelligence (AI), including an AI assistant that does tasks like summarizing team meetings and chats for users.
Is ZM Stock a Buy?
The stock of Zoom Communications has a consensus Moderate Buy rating among 26 Wall Street analysts. That rating is based on nine Buy and 17 Hold recommendations assigned in the last three months. The average ZM price target of $92.45 implies 14% upside from current levels. These ratings are likely to change following the company’s latest financial results.
