Zoom Video Shares Gain On Strong Results, $1.5 Billion Buyback

(CTN News) – As a result of better-than-expected results announced by Zoom Video Communications (ZM.O) on Tuesday and its announcement of a $1.55 billion share buyback, Zoom Video Communications (ZM.O) shares gained almost 13% in premarket trading on Tuesday.

Earlier in the day, shares of the California-based company closed the previous day at $63.12 compared to $71.10 on Tuesday.

Video conferencing companies were once market darlings during the Zoom pandemic, when most businesses shifted to virtual setups almost immediately. Since then, the company’s earnings have struggled to grow.

The company’s shares have declined by 12.2% year to date, while the benchmark S&P 500 (.SPX) has grown by 6.3% year to date, and the “clearly washed-out levels” within the stock have been proved to be some support for the stock, analysts at J.P. HSBC reported on Monday.

The shares of Zoom were up a little over 6% last year compared to the previous year.

There was an adjusted profit per share of $1.42 for Zoom, a revenue of $1.15 billion, and adjusted earnings per share of $1.42 per share for the fourth quarter ending on January 31, both above market expectations.

According to LSEG data, however, the company’s revenue forecast for fiscal year 2025 is expected to amount to $4.60 billion, which is below analysts’ average expectation of $4.66 billion for that period.

The analysts at J.P. Morgan, who lowered the brokerage’s price target by $3 to $80 and maintained a “neutral” rating for the company, said the results do not appear to indicate a material improvement in the company’s profitability.

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