Is Buying Stock In Zoom Video Communications Inc. (ZM) A Good Move Today?


Zoom Video Communications Inc. (NASDAQ:ZM) saw a downside of -2.17% to close Tuesday at $69.43 after subtracting -$1.54 on the day. The 5-day average trading volume is 2,633,440 shares of the company’s common stock. It has gained $71.84 in the past week and touched a new high 3 times within the past 5 days. An average of 2,765,090 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 3,650,360.

ZM’s 1-month performance is -0.71% or $3.54 on its low of $63.55 reached on 12/27/22. The company’s shares have touched a 52-week low of $63.55 and high of $156.05, with the stock’s rally to the 52-week high happening on 01/09/23. YTD, ZM has achieved 2.49% or $1.69 and has reached a new high 3 times. However, the current price is down -55.51% from the 52-week high price.

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Insider Transactions

ZM stock investors last saw insider trading activity on Jan 11.Tomb Gregory (President) most recently sold 4,801 shares at $70.98 per share on Jan 11. This transaction cost the insider $340,775. Pres. of Engineering & Product, Sankarlingam Velchamy, sold 2,993 shares at a price of $69.54 on Jan 10. Then, on Jan 10, Chief Financial Officer Steckelberg Kelly sold 3,224 shares at a price of $70.53 per share. This transaction amounted to $227,397.

Valuation Metrics

ZM stock has a beta of -0.27. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 4.49 while the price-to-book (PB) in the most recent quarter is 4.13, with the price to cash flow ratio at 16.38.

Zoom Video Communications Inc.’s quick ratio for the period ended July 30 was 3.20, with the current ratio over the same period at 3.20.. In terms of profitability, the gross margin trailing 12 months is 75.50%. The firm’s gross profit as reported stood at $3.05 billion against revenue of $4.1 billion.

Earnings Surprise

For the quarterly period ending July 30 this year, Zoom Video Communications Inc.’s cash and short-term investments amounted to $4.07 billion against total debt of $97.94 million. Net income and sales went up compared to those figures reported in the previous quarter. Net income shrunk -603.76% to $48.35 million, while revenue of $45.75 million was 5.38% off the previous quarter. Analysts expected ZM to announce $0.94 per share in earnings in its latest quarter, but it posted $1.05, representing a 11.70% surprise. EBITDA for the quarter stood at more than $155.4 million. ZM stock balance sheet for the quarter ending July 30 shows that total liabilities totaled 2.08 billion, with total debt at $97.94 million. Shareholders hold equity totaling $292.32 million.

Let’s look briefly at Zoom Video Communications Inc. (ZM) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 24 January was 51.09% to suggest the stock is trending Neutral, with historical volatility in this time period at 33.08%.

The stock’s 5-day moving average is $68.84, reflecting a -0.63% or -$0.44 change from its current price. ZM is currently trading +5.29% above its 20-day SMA, -14.73% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by -3.35% and SMA200 by-40.19%.

Stochastic %K and %D was 69.55% and 56.39% and the average true range (ATR) pointed at 2.77. The RSI (14) points at 49.06%, while the 14-day stochastic is at 62.14% with the period’s ATR at 2.88. The stock’s 9-day MACD Oscillator is pointing at 0.69 and 0.88 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Zoom Video Communications Inc. (NASDAQ: ZM), MKM Partners downgraded it to a Neutral rating. They previously had a Buy rating on the stock.


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