To The Moon

$Zoom(ZM)$ is set to report its Q2 2023 earnings on 21 Aug 23 (Monday) after market close.

Market is expecting Zoom to report an increase in their Q2 revenue. A 1.4% increase in revenue from $1.1 billion a year ago to $1.115 billion.

In May 22 2023, Zoom has provided a guidance for the period ending 31 July, the revenue was between $1.11 billion to $1.12 billion.

I would be looking out for this concern that Zoom might face, enterprise would have slowed down their spending hence Zoom revenue growth from Enterprise customer might slowed down.

This could happen even though Zoom has beat estimate in Q1 and they have also boost their 2024 outlook.

In this article I would be sharing on Zoom fundamental data and also look at how its current stock have been trading using technical analysis.

Zoom (ZM) Earnings Data

Analysts has estimated the EPS to be $1.06. Based on the guidance given by Zoom on 22 May 2023, for the period ending 31 July, it was between $1.04 and $1.06.

I would expect it to be around $1.06 to $1.08 given that they would still enjoying good revenues because the slowdown in enterprise spending could be felt in later quarters.

Zoom (ZM) Earnings History

The earnings before interest and taxes given in the last guidance in May 2023 was between $405 million and $410 million.

Based on the latest 2 quarters, Zoom has beaten EPS estimates.

Zoom (ZM) Financial Overview

I would expect to see an increase in their total revenue, what would be more interesting would be how much cash, cash equivalent and free cash flow would we be seeing in this upcoming financial results.

There might be a better free cash flow given that a significant increase revenue is expected.

Zoom (ZM) Hedge Funds Holdings

Hedge funds are reducing their holdings by 5.8M in the last quarter, this would mean institutional investors might be concerned about the revenue growth decreasing for enterprise customers.

I will be looking for revenues in other segment and whether there is already signs that enterprise revenue start to decrease.

Zoom (ZM) Year-To-Date Earnings

Zoom has a slight decrease in YTD growth, this could be due to the reduction of customers using Zoom especially after the post pandemic period.

Enterprise would also be cutting down on unnecessary communication tool as workers are going back to office more often.

Zoom (ZM) Sentiment Analysis

Investors are very negative on Zoom, the portfolios have decreased by 1.7% in the last 7 days and 1.4% in the last 30 days.

This could be due to the worries that Zoom software demand might be reduced significantly after staffs are now going back to office.

International travels have also resumed so there is less need for remote communications.

Technical Analysis – Simple Moving Averages (SMA)

Zoom have been on a long period of bear trend. Even though analyst are expecting an increase in revenue.

I doubt this could help Zoom share price to move towards a bull trend.

Technical Analysis – Relative Strength Index (RSI)

RSI is showing that price is moving towards the oversold region, this could indicate some buying activities happening.

But I think it would be better to monitor the price action when it start trading today (21 Aug).

Technical Analysis – Average Directional Index (ADX)

ADX is showing at below 20 which indicate a weak trend. -DI is above +DI with a wide margin, this suggest a weak bearish downside.

With an expected increase in revenue, we will have to see how market is going to react to Zoom trading.

I think there might be a chance that investors change their sentiment.

Technical Analysis – Parabolic SAR (SAR)

Zoom have a bearish reversal in early August and have been on a bearish downside movement.

This does not seem to have any trend change soon. I think it would be better for us to monitor and see how Zoom is traded today (21 Aug) before making any trade plan.

Summary

Based on what I have observed, Zoom might have a better-than-expected revenue and also EPS to beat estimate.

But its current share price is still trading in a bear trend, and there are signs that this might continue for a while. I have my reservation that Zoom could have a trend change from bearish to bullish.

This very much depends on how investors confidence on Zoom played out.

Appreciate if you could share your thoughts in the comment section whether you think Zoom would be traded higher after its financial result given that its current share price is still in a bearish trend.

@TigerStars @Daily_Discussion @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.