Zoom (ZM) shares rise 37% to record $477.93 on Q2 beats | We Compare Brokers

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Author: Alan Little Date: September 2, 2020

Zoom (ZM) shares rise 37% to record $477.93 on Q2 beats

Zoom (ZM) shares took flight on Tuesday, soaring 37% in trading after the video conferencing company smashed earnings expectations, raised its full-year outlook and received a slew of analyst upgrades.

Zoom’s recent success has been no secret as the video comms app has captured the zeitgeist during the global pandemic amid the pivot to remote working and a rise in personal calls and digital get-togethers.

The huge take-up of its services has translated into an increased bottom line, according to its latest financial report, which was released late on Monday.

Zoom said that revenues had soared 355% year over year to $663.5m, a figure that crushed the $500.5m Wall Street consensus.

Earnings of $0.92 per share also comfortably beat the $0.45 per share pre-report expectations.

Zoom’s free basic service has been hugely popular in recent months, but it has also attracted a growing number of high budget corporate customers.

Zoom said that it had 370,200 business clients with 10 employees or more during Q2, a 458% rise from the same period a year ago.

After a blowout Q2, the San Diego-based company raised its fiscal year target by more than $1bn to $2.37bn-$2.39bn.

Analysts were lining up to offer upgrades for ZM stock on Tuesday morning.

Goldman Sachs’ Heather Bellini previously had a sell rating but raised her recommendation to neutral and set a higher $402 price target.

BTIG analyst Matt VanVliet was more bullish after stating that Zoom’s quarter was “from a different planet”.

VanVliet went from neutral to buy and offered a $500 price target.

Zoom shares skyrocketed out of the gate on Tuesday and had increased by more than 37% by 12:10pm ET on the Nasdaq.

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