Zoom Video Communications, Inc. (ZM) Stock Plunged But is Bouncing Back – Invest Chronicle
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Zoom Video Communications, Inc. (ZM) Stock Plunged But is Bouncing Back

Zoom Video Communications, Inc. (ZM), a company providing video-first communications platforms, declined 6.49% in aftermarket trading session and lipped to $119. At the last check, however, the stock had gained its momentum back and was trading at $130.55. During Monday’s regular trading session, the stock surged by 5.81% and closed the day at $132.6. The sharp decline in aftermarket could be attributed to the announcement of financial results, which depicted that the profit earned by the company was less than what the estimates suggested. That in turn forced caused the stock to slump.

FY 2022 Results

On Monday, after the closure of the market, ZM announced the results for Q4 and FY 2022. The total revenue for FY 2022 was $4.09 billion, an increase of 55% on a year-over-year basis. The non-GAAP income from operations for FY 2022 was $1.6 billion compared to $983.3 million during the previous fiscal. The non-GAAP net income for the said year was $1.5 billion (or $5.07 per share) versus $995.7 million (or $3.34 per share) for FY 2021.

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Outlook for Q1 and FY 2023

Alongside the financial results, ZM also reported the financial outlook for Q1 2023 and FY 2023. The company expects the total revenues to range between $1.07 and $1.075 billion, while the non-GAAP income from operations is expected to lie between $345 and $350 million during Q1 2023. During FY 2023, the company expects to generate revenue in a range of $4.53 and $4.55 billion. The non-GAAP income from operations is expected to lie between $1.43 and $1.45 billion during FY 2023.

Comments from CEO of ZM

Eric S. Yuan, founder, and CEO of ZM commented that the company has delivered outstanding results during FY 2022. Looking ahead, the company is in midst of addressing a tremendous opportunity as it expects that the customer base would continue to transform. The company is planning to build out its platform in 2023 for sustaining its leadership position.

What’s in Store for ZM?

Analysts are of the view that ZM stock holds several negative indicators currently and hence is expected to decline in the next couple of weeks. Investors should take cautious decisions regarding their investments in ZM stock.

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