Zoom (ZM) Stock Climbs on Q1 Earnings Beat

  • Zoom Video (NASDAQ:ZM) reported stronger-than-expected first-quarter results and raised its full-year EPS guidance
  • Morgan Stanley remains very bullish on the stock
  • Cathie Wood also bought more ZM stock
Zoom (ZM) logo on a building
Source: Michael Vi / Shutterstock.com

Zoom Video (NASDAQ:ZM) stock is climbing slightly after the company reported stronger-than-expected first-quarter results and raised its full-year guidance. Meanwhile, Cathie Wood has purchased more of the company’s shares.

For its Q1 that ended last month, Zoom’s earnings per share came in at $1.03, versus analysts’ average outlook of 87 cents. Its revenue was in line with the mean outlook, surging 12% year over year. Additionally, the “number of customers contributing more than $100,000 in trailing 12 months revenue” soared 46% YOY. It reported an adjusted operating margin of 37%.

Zoom increased its fiscal 2023 EPS guidance, excluding certain items, to $3.70-$3.77, versus its previous outlook of $3.45 to $3.51.

“[I]n Q1, we delivered revenue of over one billion dollars driven by ongoing success in Enterprise, Zoom Rooms, and Zoom Phone, which reached 3 million seats during the quarter,” the company said in a statement.

The firm’s enterprise customer base climbed 24% YOY to 198,900.

Wall Street Is Bullish on ZM Stock

In the wake of Zoom’s results, Morgan Stanley wrote that sentiment toward ZM stock had turned unjustifiably negative, given the continued strength of video conferencing. Zoom is maintaining its market share well, added the firm, which views the company’s business model favorably. Morgan Stanley kept a $140 price target and an “overweight” rating on ZM stock.

Cathie Wood responded to Zoom’s Q1 results by purchasing slightly less than 100,000 shares of ZM stock. Wood’s ARK Innovation ETF (NYSEARCA:ARKK) now owns about $670 million of the company’s shares.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.


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