Zoom Communications (NASDAQ:ZM) Shares Gap Up Following Earnings Beat

Zoom Communications, Inc. (NASDAQ:ZM) shares gapped up prior to trading on Tuesday after the company announced better than expected quarterly earnings. The stock had previously closed at $78.60, but opened at $83.60. Zoom Communications shares last traded at $86.4710, with a volume of 2,104,099 shares changing hands.

The company reported $1.52 earnings per share for the quarter, beating analysts’ consensus estimates of $1.44 by $0.08. The firm had revenue of $1.23 billion during the quarter, compared to analysts’ expectations of $1.21 billion. Zoom Communications had a net margin of 33.17% and a return on equity of 12.33%. Zoom Communications’s quarterly revenue was up 4.4% compared to the same quarter last year. During the same period in the previous year, the company earned $1.38 earnings per share. Zoom Communications has set its FY 2026 guidance at 5.950-5.970 EPS. Q4 2026 guidance at 1.480-1.490 EPS.

Analyst Ratings Changes

ZM has been the subject of a number of research analyst reports. JMP Securities reissued a “market perform” rating on shares of Zoom Communications in a research report on Thursday, September 18th. Mizuho boosted their price objective on Zoom Communications from $95.00 to $100.00 and gave the company an “outperform” rating in a research note on Tuesday, August 26th. Needham & Company LLC restated a “buy” rating and set a $100.00 target price on shares of Zoom Communications in a research report on Tuesday. Stifel Nicolaus lifted their target price on shares of Zoom Communications from $80.00 to $90.00 and gave the company a “hold” rating in a report on Thursday, September 18th. Finally, Citigroup upped their price target on shares of Zoom Communications from $85.00 to $94.00 and gave the company a “neutral” rating in a research report on Monday, November 17th. Ten analysts have rated the stock with a Buy rating, fifteen have assigned a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat, the stock has a consensus rating of “Hold” and a consensus price target of $92.43.

Insiders Place Their Bets

In related news, insider Velchamy Sankarlingam sold 7,660 shares of Zoom Communications stock in a transaction on Friday, October 10th. The shares were sold at an average price of $82.00, for a total value of $628,120.00. Following the transaction, the insider directly owned 132,795 shares in the company, valued at $10,889,190. This trade represents a 5.45% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, Director Santiago Subotovsky sold 2,475 shares of the business’s stock in a transaction on Tuesday, November 4th. The shares were sold at an average price of $84.15, for a total transaction of $208,271.25. Following the completion of the transaction, the director directly owned 150,169 shares in the company, valued at $12,636,721.35. This represents a 1.62% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last 90 days, insiders have sold 389,373 shares of company stock valued at $32,311,579. 10.78% of the stock is owned by company insiders.

Institutional Trading of Zoom Communications

Hedge funds and other institutional investors have recently made changes to their positions in the company. Norges Bank purchased a new position in Zoom Communications during the second quarter worth about $539,998,000. AQR Capital Management LLC raised its stake in shares of Zoom Communications by 23.4% during the 3rd quarter. AQR Capital Management LLC now owns 8,477,057 shares of the company’s stock worth $699,357,000 after buying an additional 1,607,253 shares in the last quarter. Acadian Asset Management LLC raised its stake in shares of Zoom Communications by 41.1% during the 2nd quarter. Acadian Asset Management LLC now owns 3,769,480 shares of the company’s stock worth $293,909,000 after buying an additional 1,097,333 shares in the last quarter. Two Sigma Investments LP acquired a new stake in shares of Zoom Communications in the 3rd quarter valued at approximately $86,709,000. Finally, Vanguard Group Inc. boosted its stake in shares of Zoom Communications by 4.0% in the third quarter. Vanguard Group Inc. now owns 25,937,601 shares of the company’s stock valued at $2,139,852,000 after buying an additional 986,164 shares in the last quarter. Hedge funds and other institutional investors own 66.54% of the company’s stock.

Zoom Communications Stock Up 9.8%

The stock has a fifty day moving average of $82.61 and a two-hundred day moving average of $79.69. The stock has a market cap of $26.12 billion, a price-to-earnings ratio of 16.80, a price-to-earnings-growth ratio of 10.72 and a beta of 0.79.

About Zoom Communications

Zoom Video Communications, Inc provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company offers Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, an enterprise cloud phone system; and Zoom Chat enables users to share messages, images, audio files, and content in desktop, laptop, tablet, and mobile devices.