Zoom Communications poised to end in red after six-session rally

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Zoom Communications (NASDAQ:ZM [https://seekingalpha.com/symbol/ZM]) was on track to snap six consecutive sessions of gains on Wednesday as the stock fell 1.60% to $82.27 during afternoon trading.

Since October 14, the stock has closed in the green every day until October 21, during which period ZM rose over 5%. On a year-to-date basis, it has inched up 2.24% lagging behind the 14.52% rise in the S&P500 index.

Prior to the dip, the video communication platform’s shares closed over 2% higher consecutively for two days.

As per Seeking Alpha’s quant ratings, it is recommended to Hold Zoom. It has a score of 3.39 out of 5. The company has been graded A+ for profitability but holds an F rating for growth. However, Seeking Alpha and Wall Street analysts are bullish on the stock and have a Buy recommendation for the stock.

Last month, Seeking Alpha analyst Jay Capital [https://seekingalpha.com/article/4825212-zoom-growth-story-has-turned-positive-rating-upgrade] upgraded the stock to Buy from Hold, expressing optimism over the firm’s improved fundamentals and accelerating growth in core and new business segments.

“Enterprise revenue has reaccelerated, online has stabilized into growth, and newer products like Phone, ZCC, and AI are scaling faster than expected. Importantly, valuation now looks much more reasonable relative to peers. With the fundamentals improving and multiple new growth vectors gaining traction, I believe the setup has turned attractive enough to upgrade my view,” the analyst said, comparing it to his previous rating thesis.

Another analyst, Julian Lin [https://seekingalpha.com/article/4824631-zoom-deep-value-in-software], also reiterated his Buy rating for Zoom in September on the back of its strong balance sheet, GAAP profitability, and accelerating share repurchases.

“Despite macro uncertainty and generative AI headwinds, Zoom's low valuation and margin of safety support my continued buy rating,” he said.

MORE ON ZOOM COMMUNICATIONS

* Zoom: Growth Story Has Turned Positive (Rating Upgrade) [https://seekingalpha.com/article/4825212-zoom-growth-story-has-turned-positive-rating-upgrade]
* Zoom: Deep Value In Software With 30% Net Cash And Sky-High GAAP Margins [https://seekingalpha.com/article/4824631-zoom-deep-value-in-software]
* Zoom Communications Inc. (ZM) Zoomtopia Conference Transcript [https://seekingalpha.com/article/4823866-zoom-communications-inc-zm-zoomtopia-conference-transcript]
* Goldman's 48 potential M&A candidates [https://seekingalpha.com/news/4499689-goldmans-48-potential-ma-candidates]
* Zoom's event highlights 'commitment to innovation,' Oppenheimer says [https://seekingalpha.com/news/4496220-zooms-event-highlights-commitment-to-innovation-oppenheimer-says]