Zoom Communications Q2 Earnings Preview: Modest growth expected amid AI push

[Zoom headquarters in Silicon Valley]
Sundry Photography/iStock Editorial via Getty Images

Zoom Communications (NASDAQ:ZM [https://seekingalpha.com/symbol/ZM]) is scheduled to announce Q2 earnings results on Thursday, August 21st, after market close.

Wall Street, on average, expects the AI application software company to post a quarterly EPS of $1.38 [https://seekingalpha.com/symbol/ZM/earnings/estimates] (+3.0% Y/Y) on revenue of $1.2B (+3.4% Y/Y).

In the first quarter, results met expectations [https://seekingalpha.com/news/4451220-zoom-communications-non-gaap-eps-of-1_43-beats-by-0_12-revenue-of-1_17b-in-line], with earnings slightly ahead of forecasts. Zoom raised its annual revenue outlook, driven by continued demand from hybrid work and the addition of AI features.

Analysts from Morgan Stanley commented [https://seekingalpha.com/news/4487135-box-docusign-asana-may-see-upside-in-coming-quarters-ms], that Zoom could offer up a “stronger beat” but any kind of “durable acceleration” is probably further out. “Stabilization [is] encouraging – [but] wait for greater growth visibility before turning more positive.”

“While near-term revenue acceleration is unlikely, Zoom's financial fortress and recurring revenue offer downside protection and potential for multiple expansion,” pointed out [https://seekingalpha.com/article/4799388-zoom-30-percent-net-cash-position-more-important-amidst-market-volatility]a recent Seeking Alpha analysis.

Over the last 2 years, ZM has beaten EPS estimates [https://seekingalpha.com/symbol/ZM/earnings/eps-surprise-summary] 100% of the time and has beaten revenue estimates 88% of the time.

Over the last 3 months, EPS estimates have seen 22 upward revisions [https://seekingalpha.com/symbol/ZM/earnings/revisions] and 2 downward. Revenue estimates have seen 20 upward revisions and 1 downward.

Since the start of the year, ZM shares have fallen nearly 12%, compared to the 9% rise in the broader S&P 500 index (SP500 [https://seekingalpha.com/symbol/SP500]) in the last year.

Seeking Alpha's Quant [https://seekingalpha.com/symbol/ZM/ratings/quant-ratings] recommended the stock as a Hold, while the Wall Street analysts [https://seekingalpha.com/symbol/ZM/ratings/sell-side-ratings] see the company as a Buy.

MORE ON ZOOM COMMUNICATIONS

* Zoom: 30% Net Cash Position More Important Amidst Market Volatility [https://seekingalpha.com/article/4799388-zoom-30-percent-net-cash-position-more-important-amidst-market-volatility]
* Zoom Communications: Green Shoots Are Not Enough To Justify An Upgrade [https://seekingalpha.com/article/4795472-zoom-communications-green-shoots-are-not-enough-to-justify-an-upgrade]
* Zoom: One Of The Best Value Stocks Money Can Buy [https://seekingalpha.com/article/4792256-zoom-one-of-the-best-value-stocks-money-can-buy]
* Box, DocuSign, Asana may see upside in coming quarters: MS [https://seekingalpha.com/news/4487135-box-docusign-asana-may-see-upside-in-coming-quarters-ms]
* Earnings week ahead: WMT, HD, TGT, BIDU, ZM, MDT, ZIM, PANW, and more [https://seekingalpha.com/news/4486065-earnings-week-ahead-wmt-hd-tgt-bidu-zm-mdt-zim-panw-and-more]