Zoom Officially Get's It's MOJO Back After Body Bagging Wall Street Estimates - (Shares Pop +12.88%)

Is it just me or does Zoom also give you Kurt Russell/Robin Williams “Best of Times” vibes? The stock was great back then, but now…well, it’s lost its touch.

(Source: IMDb) 

You see, Zoom, the convenient online meeting conglomerate that kept corporate America afloat during the hogwash days of the pandemic, has definitely struggled since reaching its peak of $559 per share back in October of 2020. 

(Source: Statistica) 

However, as the world has continued to open up, resuming its post-pandemic normal, the stock has faltered since, losing -90% of its valuation (this includes one stock split as well). Meaning the only thing investors have seen when looking at Zoom over the years is a dreaded reminder that the Bell Curve lesson during their college statistics class was absolutely dreadful. 

(Source: TradingView) 

So with that in mind, it’s definitely understandable as to why Zoom is having one hell of a stellar day today after releasing new numbers to disrupt the company’s current status quo. 

In short, the stock is roaring +12.88% on the day due to their “strength” in large accounts and “resilience” in its online business, which opened the doors for Zoom to raise their guidance above Wall Street’s expectations.

(Source: MarketWatch) 

For instance, when it comes to top and bottom line numbers, EPS easily won the day as they beat estimates by a slam dunk +14.22% reporting $1.39 above analysts’ $1.22 forecast. Revenue on the other hand also saw a zinger of a nice +1.12% beat as they reported $1.16 billion (topping analysts’ $1.15 billion projections). 

(Source: Silicon Angle) 

So clearly, investors are definitely ecstatic to see earnings accelerate, even as revenue is barely keeping pace. However, when it comes to the year-over-year results, Zoom is posting some insane numbers that make its 2020 letterman jacket of accomplishments blush. For example, net income, diluted EPS, and net profit margin legit went full on Animal House as they all skyrocketed 1,300.6%, 1,280%, and 1,253.57% YoY. 

(Source: Giphy) 

Translation: Zoom investors are throbbing bigly right now…

In addition, the company also projected new revenue of at least $4.63 billion, with cash earnings of about $5.30 a share (exceeding Wall Street expectations). Pretty impressive if I do say so myself. 

Not surprisingly, this now has the consensus price targets on Zoom sitting at +64.05% upside. However, it is worth noting that some analysts' price targets were actually lowered on the earnings news. Analysts at Robert Baird and Bank of America, for example, both lowered their price targets by $3 and $7 to $77 and $75, respectively.  

(Source: The Fly) 

Now of course, despite the lowering of the price targets, both of these companies are still bullish on Zoom as each of these targets indicate a +27.84% and +24.52% upside for the stock from current levels.

So clearly, not bad at all, but definitely not overflowing with confidence either. However, when it comes to the technical analysis, Zoom’s price action is basically screaming “F**k Off” to all the haters as all 17 of our technical analysis indicators are about to blow past the gauge with  “Strong Buys” - while all 15 moving averages are following suit, hinting at more uptrend continuation ahead.

Which means that even though Zoom feels like the star athlete who graduated 10 years ago  and still wears his letterman jacket around, the stock may still have some room to run with the momentum of its strong numbers and bullish price action.

Now again, like always, in no way, shape, or form am I saying YOLO the Dip Buy here, especially considering that this isn’t the first time Zoom has beat estimates during its massive sell-off over the years. 

(Source: Giphy) 

Which is why if you’re chomping at the bit to catch the potential reversal on Zoom, I’d definitely conduct some more due diligence to see if the risk is worth it for you. 

But of course, while some may act accordingly on this or not… It's obvious that Zoom may be turning the tide from this point on. And hey, if this Monkeypox thing gets too bad, Zoom may end up getting its “Best of Times” back after all. Who knows…

At the time of this writing, Zoom is up +12.86% on the day. 

 Stocks.News does not hold positions in any company mentioned in the article.