Zoom Video (ZM) is set to report Q1 (Apr) results today after the close (reported at 16:20 last time) with a call to follow at 5:30pm ET.
Current S&P CapitalIQ consensus is for EPS of $0.10 and revenue of $203.5 mln. ZM typically guides for EPS and revenue for the next quarter and full year.
As a provider of a cloud-based video-conferencing platform, Zoom Video is one of the most direct beneficiaries of the shift to home as business meetings and online classrooms are now routinely conducted online.
ZM made its IPO debut just over a year ago in April 2019. This will just its fifth earnings report as a public company. Each quarter, Zoom has posted solid upside for both EPS and revenue along with upside guidance.
The stock rallied 14% yesterday, In part for this Q1 earnings report, but also because the civil unrest has likely led to even more usage of video conferencing as public transit has been limited and some cities are closing off their downtown areas.
Another reason for the move yesterday was Zoom announcing plans to strengthen IT security for its hosted video calls.
The metric to watch is gross margin.
TECHS:
The main concern with Zoom is that it may be priced to perfection with a $58 bln market cap and a price/sales of 61x, which is very expensive.
Last quarter ZM reported a beat-and-raise and the stock still sold off on their gross margin comment. Make note taht when a stock is priced to perfection, any perceived crack in the report like the slightly bearish gross margin guidance can result in a pretty sizeable pullback in the stock. If the company is able to
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