The video conferencing company Zoom Video Communications (ZM) is set to announce its Q2 2025 results on August 21. Wall Street analysts expect the company to report earnings of $1.21 per share for Q2, down 9.7% year-over-year. Meanwhile, analysts project a slight decline in revenues, with a 0.96% year-over-year decrease to $1.15 billion in Q2.
Undoubtedly, Zoom’s growth has slowed over the past few years as demand for its primary video conferencing service has waned. As a result, the shares have fallen 82% over the past three years and 11% over the past year.
However, despite this slowdown, Zoom has maintained a strong record of earnings surprises, surpassing estimates in each of the last nine quarters.
Website Traffic Suggests Potential Headwinds
Being a cloud-based video conferencing company, tracking user visits to its website is crucial for determining the ongoing popularity of its solutions. As Zoom makes the majority of its money through subscriptions to its communications platform, more visits might lead to more subscriptions, resulting in more revenues for the firm, and vice versa.
Therefore, we investigated Zoom’s monthly user data using TipRanks’ website to get a clearer view of the company’s current status ahead of the Q2 print.
When taking a look at Zoom’s website traffic, the trends seem to suggest that the company could be facing potential headwinds. As the image below shows, total estimated visits to zoom.us declined by 29.45% year-over-year and 26.31% sequentially.
Zoom Struggles Amid Rising Competition
Let’s understand a few concerns investors should be aware of. According to TipRanks’ Bulls Say, Bears Say tool, competition has been intensifying in the communications and collaboration industry, which clouds future growth prospects.
In addition, bears argue that Zoom faces significant challenges, including a slowdown in enterprise customer additions. They also pointed out the weak revenue growth amid a challenging macroeconomic environment.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting an 8.06% move in either direction.
Is Zoom a Buy or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on Zoom stock based on one Buy and 11 Holds assigned in the past three months, as indicated by the graphic below. The analysts’ average price target on ZM stock of $71.70 implies an upside potential of 19.86%.
