ZOOM shares fell after a report due to a growth slowdown
ZOOM Video Communications on Monday reported income and profit above the forecasts of market analysts. However, investors were disappointed with a slowdown in growth.
Shares Zoom Video Communications (ZM) fell 10% after the closure of trading on Monday, despite the general positive financial report of the company for the second quarter, which ended on July 31.
ZOOM shares fell to a minimum of $ 305,20 postmarket on Monday from a $ 347.50 mark at the time of the trading closure.
Wall Street analysts and investors are concerned about the current deceleration of ZOOM business growth since the macro-situation with the Pandemic COVID-19 has changed. As a result, people can give less preference to its main product – the video conferencing service.
While in 2020, Zoom Video promotion jumped almost five times, they rose only by 3% this year.
Zoom Financial Report for the Second Quarter
The profit rose by 48% to $ 1.36 per share, above-average market analysts at $ 1.16. The number of quarterly profits reached $ 316.9 million, compared with $ 185.7 million a year earlier.
Sales revenues increased by 54% to $ 1.02 billion, which is higher than an average analyst assessment of $ 990.2 million, but these growth rates are three times lower than in the previous quarter. Statistics of quarterly income and profit Zoom Video.
Kelly Steckelberg, the financial director of Zoom, explained the slowdown in the growth rate of the seasonal weakness of the quarter since educational institutions did not work. In contrast, the quarter included two months of traditional vacations.
Free cash flow (available for investment) rose by 22% to $ 455 million.
Quarterly forecast Zoom does not promise growth.
The main reason for the fall of the ZOOM action on Monday was that the company gave an income forecast for the third quarter Fin. 2022 in the range of $ 1.015 – $ 1.020 billion, which means a slowdown or lack of growth compared to the second quarter.
The forecast arrived at the auction for the current quarter indicates the expected reduction of profits to $ 1.07 – $ 1.08 per share, which is below the average analysts of Wall Street analysts.
Zoom did not attract so many large customers as analysts expected. The company reported 504,900 clients with more than ten employees, 36% more than a year earlier, but analysts have expected numbers in 509,316 customers. In the previous quarter, Zoom attracted 87% more customers compared to the last quarter.
Nevertheless, the company’s annual forecast is higher than the market expectations. The Zoom Video Guide expects concerns to the account of the strain of COVID-19 Delta will restrain the plans of companies to return employees to the office; in addition, the work at home is becoming an increasingly popular phenomenon.
Zoom has raised its annual profit forecast: from the range of $ 4.56 – $ 4.61 per share to $ 4.75 – 4.79 (growth compared to $ 3.34 in Fin. 2021), which is higher than the market analysts in $ 4.67.
Zoom also raised its forecast for annual sales: range of $ 3.98 – $ 3.99 billion to $ 4.005 – $ 4,015 billion (an increase of 53.8% compared to Fin. 2021), which is also ahead of the analysts forecast of $ 4.01 billion.
A significant factor in the future growth of Zoom Video can be his acquisition of the company Five9, which earns the cloud contact centers technologies.
This transaction will become the largest in the history of ZOOM. Moreover, it can be one of the largest in the technological industry – the size of the trade with all the shares covers about $ 14.7 billion. It that the transaction will be closed in the first half of 2022.
