Zoom Video shares gain on strong results, $1.5-billion buyback
Reuters
Published Feb 27, 2024 06:52AM ET
Updated Feb 27, 2024 09:56AM ET
(Reuters) -Zoom Video Communications' shares gained more than 7% in early trading on Tuesday after the company delivered better-than-expected results and announced a share buyback of up to $1.5 billion.
At the current price of $67.3, the company added over $1 billion to its market capitalization.
The video-conferencing company was a stock market darling during the pandemic when most businesses adopted virtual setups almost overnight but has struggled to build on since.
The company's shares are down 12.2% this year as of Monday's close, compared with a 6.3% rise in benchmark S&P 500. The stock had gained just over 6% last year.
The "clearly washed-out levels" are proving some support to the stock, analysts at J.P. Morgan said. Zoom (NASDAQ:ZM) posted an adjusted per-share profit of $1.42 on $1.15 billion revenue - both above market expectations - in its fiscal fourth quarter ended January 31.
However, its fiscal year 2025 sales forecast of about $4.60 billion fell short of analysts' average expectation of $4.66 billion, according to LSEG data.
Analysts at J.P. Morgan, which lowered the brokerage's price target by $3 to $80 and maintained a "neutral" rating, said the results do not convey a materially improving business.
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Written By: Reuters
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