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Zoom Earnings Crush Estimates Once Again; ZM Stock Hits All-Time High

Zoom Video Communications (ZM) reported second-quarter earnings and revenue late Monday that once again blew past consensus estimates. Zoom earnings guidance also topped expectations, sending shares in the "work-from-home" stock up in extended trading.

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In addition, Zoom Video raised its revenue forecast for full-year fiscal 2021. It projected revenue in a range of $2.37 billion to $2.39 billion, up from its previous forecast of $1.775 billion to $1.8 billion.

Zoom said July-quarter earnings surged to 92 cents a share on an adjusted basis. Revenue soared 355% to $663.5 million, the San Jose, Calif.-based company said.

A year earlier, Zoom earned 8 cents a share on sales of $145.8 million. Analysts projected Zoom earnings of 45 cents a share on sales of $500.5 million for the period ended July 31.

For the current quarter ending in October, Zoom forecast revenue of $685 million to $690 million vs. analyst estimates of $492.9 million. Zoom said it expects adjusted profit in a range of 73 cents to 74 cents a share vs. estimates of 35 cents.

Zoom Earnings: Revenue Outlook Tops Estimates

Shares in Zoom Video rose 9.3% to near 355 in after-hours trading on the stock market today. In Monday's regular trading session, Zoom stock bolted 8.6% to an all-time closing high of 325.10.

The company ranks No. 22 in the IBD 50 roster of growth stocks.

Zoom's basic video-calling app is free. Usage has surged amid the coronavirus emergency and stay-at-home directives. The company may provide more data on Zoom Phone growth at an analyst day slated for Oct. 14.

Heading into the Zoom earnings report, analysts focused on its ability to convert consumers into paid subscribers. Another issue is its ability to retain business users as the economy reopens.

Zoom Video does not break out paid subscribers in financial reports. The company said it had 370,200 business customers, each with more than 10 employees, as of the quarter's end on July 31. That's up nearly 40% from 265,400 in the April quarter.

Zoom Stock: Competition Heating Up

Heading into the Zoom earnings report, the stock had a Relative Strength Rating of 98 out of a possible 99.

In the business market, Zoom Video competes with Microsoft (MSFT), Cisco Systems (CSCO), RingCentral (RNG), Verizon Communications (VZ), Facebook (FB), Alphabet's (GOOGL)Google and others.

Zoom's cloud-based software sets up audio and videoconferencing, with chat tools also available. Customers also can easily share content.

The Zoom initial public offering in April 2019 raised $752 million, with shares priced at 36.

Prior to the Zoom earnings release, the work-from-home stock had shot up some 349% in 2020. Further, Zoom stock shrugged off earlier negative reports over security vulnerabilities and consumer privacy.

From a technical view, Zoom stock is extended from a proper entry point of 275.19.

Follow Reinhardt Krause on Twitter @reinhardtk_tech   for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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