This trade activity should not be overlooked: Zoom Video Communications Inc. (ZM)

Zoom Video Communications Inc. (NASDAQ: ZM) stock fell -4.60% on Wednesday to $62.63 against a previous-day closing price of $65.65. With 7.54 million shares changed hands, the volume of the stock remained heavier than its average volume of 4.27 million shares. The 52-week range on ZM shows that it touched its highest point at $124.05 and its lowest point at $60.45 during that stretch. It currently has a 1-year price target of $84.53. Beta for the stock currently stands at -0.25.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ZM was down-trending over the past week, with a drop of -7.69%, but this was down by -0.67% over a month. Three-month performance dropped to -16.01% while six-month performance fell -21.97%. The stock lost -29.89% in the past year, while it has lost -7.54% so far this year. A look at the trailing 12-month EPS for ZM yields -0.03 with Next year EPS estimates of 4.36. For the next quarter, that number is 1.05. This implies an EPS growth rate of -92.40% for this year and 3.41% for next year. EPS is expected to decline by -10.37% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 66.00%.

Float and Shares Shorts:

At present, 297.41 million ZM shares are outstanding with a float of 227.71 million shares on hand for trading. On Apr 27, 2023, short shares totaled 14.46 million, which was 4.86% higher than short shares on Mar 30, 2023. In addition to Mr. Eric S. Yuan as the firm’s Pres, CEO & Chairman, Ms. Kelly Steckelberg serves as its CFO & Treasurer.

Institutional Ownership:

Through their ownership of 66.26% of ZM’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 34.26% of ZM, in contrast to 30.66% held by mutual funds. Shares owned by individuals account for 2.66%. As the largest shareholder in ZM with 8.02% of the stake, The Vanguard Group, Inc. holds 19,817,067 shares worth 19,817,067. A second-largest stockholder of ZM, ARK Investment Management LLC, holds 10,867,033 shares, controlling over 4.40% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in ZM, holding 9,302,736 shares or 3.76% stake. With a 3.33% stake in ZM, the ARK Innovation ETF is the largest stakeholder. A total of 8,218,290 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 2.63% of ZM stock, is the second-largest Mutual Fund holder. It holds 6,495,512 shares valued at 399.02 million. Vanguard Mid Cap Index Fund holds 1.97% of the stake in ZM, owning 4,874,763 shares worth 299.46 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Apr 29, 2023, ZM reported revenue of $1.07B and operating income of $187.06M. The EBITDA in the recently reported quarter was $238.75M and diluted EPS was $0.37.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ZM since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With ZM analysts setting a high price target of $105.00 and a low target of $65.00, the average target price over the next 12 months is $83.29. Based on these targets, ZM could surge 67.65% to reach the target high and rise by 3.78% to reach the target low. Reaching the average price target will result in a growth of 32.99% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded ZM stock several times over the past three months with 12 Buys and 36 Sells. In these transactions, 84,571 shares were bought while 126,638 shares were sold. The number of buy transactions has increased to 61 while that of sell transactions has risen to 134 over the past year. The total number of shares bought during that period was 376,418 while 313,152 shares were sold.

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