Nucor earnings beat by $0.08, revenue fell short of estimates
Tuesday, Zoom Video Communications Inc (NASDAQ:ZM) shares declined in after-hours trading following the company’s year-end financial report. RBC Capital Markets reaffirmed their Outperform rating and a $95.00 price target on the stock. According to InvestingPro data, Zoom maintains excellent financial health with a "GREAT" overall score, supported by strong cash flows and solid profitability metrics. The report noted that Zoom had a solid finish to the year, bolstered by accelerating enterprise growth, and signs of stabilization in the online segment.
Zoom’s financial performance in the fourth quarter was highlighted by the increased adoption of its services by enterprise customers, maintaining impressive gross margins of 75.8%. InvestingPro analysis suggests the stock is currently trading below its Fair Value. The guidance for fiscal year 2026 was only roughly in line with expectations, which caused a 3% dip in the company’s stock price after the market closed.
The fiscal year 2026 projections were slightly adjusted downward due to foreign exchange fluctuations and the impact of the leap year. Despite these adjustments, RBC Capital analysts expressed confidence in Zoom’s conservative outlook for the year ahead.
Zoom’s management team is scheduled to meet with investors at the Enterprise Connect conference on March 18, 2025. RBC Capital has invited interested investors to contact their sales representative to arrange meetings with Zoom’s management during the event. This provides an opportunity for investors to engage directly with the company and gain further insights into its strategic direction and operational performance.
In other recent news, Zoom Video Communications Inc. reported a robust performance in its fourth quarter of 2025, with earnings per share (EPS) of $1.41, surpassing the forecasted $1.30. The company’s revenue for the quarter was $1.184 billion, aligning with expectations and marking a 3% year-over-year increase. Despite these positive results, Piper Sandler maintained a Neutral rating on Zoom stock, with a price target of $89.00, due to a slight miss in the company’s sales guidance for the upcoming fiscal year 2026. Piper Sandler noted that Zoom’s revenue growth is being driven by newer products like Customer Experience and Workvivo, alongside benefits from the discontinuation of Amazon (NASDAQ:AMZN) Chime and a partnership with Mitel.
Zoom’s enterprise revenue grew by 6%, now making up 60% of the total revenue, and free cash flow increased by 25% year-over-year to $416 million. The company is focusing on AI advancements and platform expansion, particularly within the enterprise market. Piper Sandler highlighted concerns about Zoom’s decision to stop reporting the Direct customer count metric, suggesting it might signal plateauing customer growth. Despite these challenges, Zoom continues to innovate and expand its product offerings, which include AI-powered solutions that are gaining traction in the market.
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