What Technical Indicators Show About ZM (ZM)?

Zoom Video Communications Inc. (NASDAQ:ZM) trading with an addition of $1.98 to $268.22 on Thursday, an upside of 0.74 percent. An average of 2,367,879 shares of common stock have been traded in the last five days. There was a gain of $15.68 in the past week, and it reached a new high 3 times over the past 12 months. The last 20 days have seen an average of 3,826,730 shares traded, while the 50-day average volume stands at 4,621,808.

ZM stock has decreased by -5.40% in the last month. The company shares reached their 1-month lowest point of $250.11 on 10/06/21. With the stock rallying to its 52-week high on 02/16/21, shares of the company touched a low of $250.11 and a high of $588.84 in 52 weeks. It has reached a new high 11 times so far this year and lost -21.07% or -$65.37 in price. In spite of this, the price is down -54.45% from the 52-week high.

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Insider Transactions

2 days have passed since Zoom Video Communications Inc. (ZM) last reported insider trading activity. Sankarlingam Velchamy, who is Pres. of Engineering & Product, most recently acquired $2,354 shares at $255.27 per share on Oct 12. In this transaction, the insider spent $600,906. Chief Operating Officer, Bawa Aparna, disposed of 1,913 shares at a price of $259.62 on Oct 05. The insider now owns more than $496,653 worth of shares. Prior to that, Chief Financial Officer Steckelberg Kelly went on to Sale 6,700 shares at $255.65 each on Oct 04. An amount of $1,712,836 was transacted.

Valuation Metrics

Zoom Video Communications Inc. (ZM) has a trailing price-to-earnings (P/E) ratio of 80.39, which compares with the 29.20 for the broader industry and 30.89 for the sector. In the last five years, Zoom Video Communications Inc.’s PE ratio has ranged between 3405.24 and 76.63. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 21.85, the price-to-book (PB) ratio at 16.90, and the price-to-cash flow ratio at 47.44.

The quick ratio of Zoom Video Communications Inc. for the three months ended July 30 was 3.50, and the current ratio was 3.50, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.00 for the quarter ending July 30. On the profitability front, the trailing 12-month gross margin is 71.10% against a 5-year average of 78.2%. Zoom Video Communications Inc.’s EBITDA margin for the year ending July 30 is 30.32%, while its operating margin for the same period stands at 26.60%. Its gross profit as reported stood at $1.83 billion compared to revenue of $2.65 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Zoom Video Communications Inc.’s return on assets was 19.30%. For the broader industry, ROE averaged 3.34 over the past year.

Earnings Surprise

For the three-month period that ended July 30, Zoom Video Communications Inc. had $3.17 billion in cash. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $316.93 million in the quarter, while revenues of $227.38 million were grew 41.39%. The analyst consensus anticipated Zoom Video Communications Inc.’s latest quarter earnings to come in at $1.16 per share, but it turned out to be $1.36, a 17.20% surprise. For the quarter, EBITDA amounted to $348.26 million. Shareholders own equity worth $297.13 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Zoom Video Communications Inc. (ZM) price momentum. RSI 9-day as of the close on 13 October was 57.39%, suggesting the stock is Neutral, with historical volatility in this time frame at 31.19%.

As of today, ZM’s price is $260.54 +6.12% or $15.68 from its 5-day moving average. ZM is currently trading -2.25% lower than its 20-day SMA and -15.43% lower than its 100-day SMA. However, the stock’s current price level is -32.11% below the SMA50 and -23.12% below the SMA200.

The stochastic %K and %D were 55.75% and 34.09%, respectively, and the average true range (ATR) was 8.52. With the 14-day stochastic at 86.91% and the average true range at 9.10, the RSI (14) stands at 47.14%. The stock has reached 5.75 on the 9-day MACD Oscillator while the 14-day reading was at 3.81.

Analyst Ratings

Morgan Stanley upgraded Zoom Video Communications Inc. (NASDAQ: ZM) to a an Overweight rating in its most recent analyst report. Previously, the stock was rated as a an Equal-weight.The consensus rating for Zoom Video Communications Inc. (ZM) among analysts is Overweight. According to current brokerage recommendations, 1 brokerage firm advise that investors sell ZM, while 12 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 12 others rate it as a “buy”.


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