Zoom (ZM) shares are sinking 17% on Tuesday, despite a better-than-expected quarter on the top and bottom line. The video conferencing company's stock is under pressure amid fears of a slowdown in virtual meetings as the pandemic eases.<\/p>\n
\"It's a little bit too much overblown in our view,\" said James Fish, senior research analyst at Piper Sandler. The analyst has a $299 price target on the stock.<\/p>\n
\"Just look at Enterprise, which grew 65% on its own, and Commercial Fees, which are still growing at a nice clip. You're really left with an interesting valuation,\" said Fish.<\/p>\n
Zoom's revenue rose last quarter to $1.05 billion. Adjusted earnings came in at $1.11 per share. Both of those metrics beat analyst expectations.<\/p>\n
\"The quarter itself had more net positives but the problem is you had a couple of dynamics that investors didn't want to hear,\" Piper Sandler analyst Jame Fish told Yahoo Finance Live.<\/p>\n
The number of larger clients, those with more than 10 employees, came in in 512,100. That metric came in slightly short of estimates.<\/p>\n
\"We didn't get much color around we call speedboat products, 'Phones' or 'Rooms',\" said Fish, referring to products Zoom is aiming to grow in the future.<\/p>\n
\"It's a little bit of a concern as you start to think about next year, in terms of what the growth rate could be relative to valuation,\" said Fish.<\/p>\n
Zoom expects its customer retention rate to tick down in the fourth quarter. It also predicts a slowdown in differed revenue.<\/p>\n
Zoom's share price has come back down to earth after a meteoric rise last year during the worst of the pandemic. Investors are pricing in a slowdown going forward as more employees return to the office.<\/p>\n
ZM is a top trending ticker on Yahoo Finance. The stock is down about 40% year-over-date. The stock is at a 52-week low. It closed at an all-time high of $559 in October of 2020.<\/p>\n
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Zoom stock: The sour market reaction to earnings is too much overblown, analyst says - Yahoo Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Zoom (ZM) shares are sinking 17% on Tuesday, despite a better-than-expected quarter on the top and bottom line. The video conferencing company's stock is under pressure amid fears of a slowdown in virtual meetings as the pandemic eases Continue reading