Zoom (ZM) Stock Down in Pre-Market after Bleak Current Fiscal Forecast

UTC by Benjamin Godfrey · 3 min read
Zoom (ZM) Stock Down in Pre-Market after Bleak Current Fiscal Forecast
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Zoom was amongst the companies that rode on the lockdown enactments of the coronavirus pandemic to boost its business model. The company inked its biggest market valuation in 2020 in the heat of the pandemic with its capitalization topping $159 billion in October of the same year.

The stock of Zoom Video Communications Inc (NASDAQ: ZM) plunged in the Pre-market by as much as 4.65% following a disappointing forecast for the current fiscal year. Zoom Video Communications, known for its cloud-based videotelephony and online chat services reported its fourth-quarter and fiscal year ended January 31, 2022, in which it reported Q4 revenue of $1.071 billion, up 21% year-over-year.

The revenue for the full year came in at $4.099 billion, up 55% when compared to the same period in prior year. While the fourth quarter GAAP income from operations was pegged at $251.8 million, down 2% year over year, the full fiscal year GAAP income from operations came in at $1.0636 billion, up 61% year over year.

The company’s performance extended to its subscribers as the Year-end number of customers contributing more than $100,000 in the trailing 12 months revenue came in at 2,725, up approximately 66% year over year.

“In fiscal year 2022, we delivered strong results with total revenue of more than $4 billion growing 55% year over year along with increased profitability and operating cash flow growth as our global customer base continued to grow and find new use cases for our broadening communications platform,” said Zoom founder and CEO, Eric S. Yuan. “Looking forward, we are addressing a large opportunity as we expect customers will continue to transform how they work and engage with their customers. It is apparent that businesses want a full communications platform that is integrated, secure, and easy to use.”

Zoom’s performance in terms of its operational capabilities also shows in the Net Cash Flow generated by operating activities came in at $1.6053 billion for the fiscal year, compared to $1.4712 billion for the fiscal year 2021. 

Other Highlights and Impact of Future Forecast on ZM Stock

Zoom was amongst the companies that rode on the lockdown enactments of the coronavirus pandemic to boost its business model. The company notably inked its biggest market valuation in 2020 in the heat of the pandemic with its capitalization topping $159 billion in October of the same year.

However, the recovery of most companies and the return of employees to the workplace has placed some forms of regression to the company’s growth tracks. In the latest performance report, the company said it has approximately 509,800 customers with more than 10 employees, a figure that is up approximately 9% from the same quarter last fiscal year. Despite this impressive customer metric, the figure is still down from the 512,100 inked back in October.

In the wake of being open to reality, Zoom is not overly optimistic about the current quarter and the current full-year financial guidance. By giving a conservative forecast, investors lost confidence, selling ZM Stock at such as fast pace that lead to the drop in the Pre-Market. initially rose as high as 13% before finally cresting at the current position it is in.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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