Zoom Video zooms down 5% on 'lump of coal' business outlook
Kena Betancur/Getty Images News

Zoom Video Communications (NASDAQ:ZM) shares recouped some of their losses as trading progressed Tuesday, but remained bruised as investors showed growing concerns about the company's disappointing outlook.
At issue was Zoom (ZM) saying on Monday that for its fiscal fourth quarter, it expects to earn between 75 cents and 78 cents a share, on revenue in a range of $1.095B to $1.105B. That outlook fell short of analysts' consensus forecasts for earnings of 81 cents a share on revenue of $1.115B 
Piper Sandler analyst James Fish gave some Scrooge-like sentiment about Zoom's (ZM) outlook, and said the company had delivered "an early lump of coal" for its fourth quarter and beyond. Fish said that several "lead metrics" such as revenue that is under contract and set to be recognized over the next 12 months, and new business "continue to decelerate and miss," total customers "are declining" and the company's outlook suggests business in its 2024 fiscal is likely to come in flat on a year-over-year comparison.
Fish left his neutral rating on Zoom's (ZM) stock unchanged, but cut his price target to $77 a share from $84.
With Zoom's (ZM) outlook on many investors' minds, the company's shares remained down by more than 5% in late trading on Tuesday after dropping by 10% earlier in the day.
Along with its outlook, Zoom (ZM) reported a third-quarter profit of $1.07 a share, excluding one-time items, on revenue of $1.102B. Analysts had forecast Zoom (ZM) to earn 83 cents a share on sales of $1.094B for the quarter that ended October 31.
Baird analyst William Power called Zoom's (ZM) third-quarter results "solid", but said the company's outlook was "mixed" due in large part to the effects of foreign currency exchange rates and a weak outlook for deferred revenue. Power didn't change his outperform rating on Zoom's (ZM), but cut his price target to $95 a share from $100.
In an effort to expand find new sources of business, Zoom (ZM) and theatre-chain AMC (AMC) said they would work together to turn some of AMC's (AMC) locations into Zoom meeting rooms.