Why did Zoom stock tank today? Weak Q2, guidance hits software maker
Luis Alvarez


Zoom Video Communications (NASDAQ:ZM) plunged nearly 17% on Tuesday after the communications software company reported second-quarter results that missed estimates and provided soft guidance.
Zoom (ZM) said on an adjusted basis, it expects to earn between 82 and 83 cents per share for its third quarter, 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.
For the period ending July 31, Zoom (ZM) said 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.
As a result of the weaker-than-expected results, several analysts fretted over Zoom's (ZM) ability to keep growing, with one Wall Street firm downgrading shares. 
BTIG analyst Matt VanVliet lowered his rating on Zoom (ZM) shares to neutral from buy, noting the continued macro headwinds the company is likely to keep facing, including its online business and continued pressure in the EMEA region.
"Overall, the pullback in [fiscal 2023] profitability and [free cash flow] is somewhat concerning as topline growth slows further, and thus we are downgrading shares of [Zoom] to Neutral given significantly reduced near-term expectations," VanVliet wrote in a note to clients.

Hedge fund Tiger Global Management recently disclosed that it exited its stake in Zoom (ZM) during the second-quarter, along with several other changes to its portfolio.