Zoom heads south as outlook suggests growth is getting more challenging
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Zoom Video Communications (NASDAQ:ZM) shares fell by as much as 8% in after-hours trading Monday as the company gave a third-quarter outlook that suggests its pandemic-related meteoric growth may be hitting the brakes.
After U.S. stock markets closed, Zoom (ZM) said that for its third quarter, it expects to earn between 82 cents and 83 cents a share, excluding one-time items, on revenue in a range of $1.095B to $1.1B. During the third quarter of 2021, Zoom (ZM) earned $1.11 a share, excluding one-time items, on revenue of $1.051B.
Along with its third-quarter outlook, Zoom (ZM) also delivered a mixed second-quarter report that included sales that just missed the expectations of Wall Street analysts.
Zoom (ZM) said that for the quarter that ended July 31, it earned $1.05 a share, excluding one-time items, on revenue of $1.1B, compared to analysts' expectations for a profit of 93 cents a share, on $1.12B. During the same period a year ago, Zoom (ZM) earned $1.36 a share, excluding one-time items, on $1.02B in revenue.
Zoom's (ZM) results come less than a week after Citi analyst Tyler Radke cut his rating on the company's stock due to what he said were "new hurdles" that Zoom (ZM) is facing as it seeks to maintain growth in the years ahead.