What Happened?
Shares of video communications platform Zoom (NASDAQ:ZM) jumped 13.5% in the afternoon session after the company reported better-than-expected third-quarter results and raised its full-year profit outlook.
For its third quarter, Zoom posted revenue of $1.23 billion, surpassing the consensus estimate of $1.21 billion and representing a 4.4% increase year-over-year. The company's adjusted earnings per share came in at $1.52, also beating analyst forecasts of $1.44. Building on this strong performance, Zoom lifted its full-year adjusted earnings per share guidance to a new midpoint of $5.96. The combination of exceeding current expectations and signaling higher future profitability resonated strongly with investors, driving the stock higher.
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What Is The Market Telling Us
Zoom’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Zoom and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 1.5% on the news that an analyst at Rosenblatt increased the company's price target to $115 from $110 while keeping a Buy rating on the shares.
The firm cited “highly bullish” channel checks and raised its revenue estimates for fiscal years 2026 and 2027 ahead of Zoom's next earnings report. The positive outlook was also tied to what the analyst called the company's “180-degree” pivot to a partner-first model. This shift in its sales approach was described as “supercharging” its efforts to bring products to market, signaling strong confidence in the company's future performance.
Zoom is up 10.7% since the beginning of the year, and at $90.26 per share, has set a new 52-week high. Investors who bought $1,000 worth of Zoom’s shares 5 years ago would now be looking at an investment worth $203.45.
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