Earnings Results: Zoom shares tumble despite solid results

Earnings Results: Zoom shares tumble despite solid results

4 Mar    Finance News

Zoom Video Communications Inc. tumbled 7% in after-hours trading Wednesday after it reported better-than-expected results that did not meet lofty expectations.

Thus may end the teleconferencing company’s ZM, -0.57%  recent spectacular stock run as one of the few tech companies to benefit from the coronavirus fears.

Zoom reported net income of $15.3 million, or 5 cents a share, in the fourth quarter, compared with net income of $1.2 million, or 1 cent a share, in the year-ago fourth quarter.

Revenue soared 78% to $188.3 million from $105.8 million a year ago.

Analysts surveyed by FactSet had expected a loss of 1 cent a share on sales of $176.5 million.

If there has been a tech stock immune to coronavirus, it’s been Zoom. In fact, it has thrived as more people are flock to its remote-work tools like videoconferencing as the virus continues to spread.

“In the last 30 days alone, average daily downloads are up 90% versus the prior 30-day period, with greater user engagement as evidenced by a 17% increase in user session per day and a 3% increase in average session length,” Bernstein analyst Zane Chrane wrote in a note to clients last week. Zoom has already added more new active users this year than it did in 2019, he added.

See also: Zoom Video is seeing a surge in downloads amid coronavirus panic, analyst says

Shares of Zoom, which went public on April 18, 2019, are up 89% since then. The broader S&P 500 index SPX, +4.22%   is up 12.9% in the past year.

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