Zoom Communications (ZM) Suffers a Larger Drop Than the General Market: Key Insights

The investment community will be closely monitoring the performance of Zoom Communications in its forthcoming earnings report. The company is scheduled to release its earnings on August 25, 2026. On that day, Zoom Communications is projected to report earnings of $1.5 per share, which would represent a year-over-year decline of 1.96%. Simultaneously, our latest consensus estimate expects the revenue to be $1.27 billion, showing a 4.22% escalation compared to the year-ago quarter.

ZM's full-year Zacks Consensus Estimates are calling for earnings of $6.17 per share and revenue of $5.09 billion. These results would represent year-over-year changes of +4.22% and +4.54%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Zoom Communications. These revisions help to show the ever-changing nature of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.01% higher. Currently, Zoom Communications is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Zoom Communications has a Forward P/E ratio of 17.39 right now. This denotes a discount relative to the industry average Forward P/E of 21.5.

It's also important to note that ZM currently trades at a PEG ratio of 3.92. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software industry currently had an average PEG ratio of 1.18 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 101, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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