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Zoom Stock Reverses Down As ZM Stock Earnings Beat Amid Slowing Growth - Investor's Business Daily

Zoom Video Communications (ZM) reported third-quarter earnings and revenue on Monday that edged by estimates amid elevated turnover of small business customers. Zoom stock reversed down after initially rising on the earnings report.

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The San Jose, Calif.-based software maker released its report after the market close. Zoom earnings rose 12% to $1.11 a share on an adjusted basis from a year earlier.

Revenue jumped 35% to $1.051 billion. A year earlier, Zoom earned 99 cents a share on sales of $777.2 million.

Zoom stock analysts projected earnings of $1.09 a share on sales of $1.02 billion for the period ended Oct. 31.

Zoom Stock: Large Customer Growth

The company said it had 2,507 customers contributing more than $100,000 each annually, up from 2,278 as of July 31.

For the current quarter ending in January, Zoom Video forecast revenue of $1.052 billion vs. estimates of $1.018 billion.

"Looking forward, we expect to close the year between $4.079 to $4.081 billion in total revenue, representing approximately 54% year-over-year growth, alongside strong profitability and operating cash flow growth," said Zoom founder and Chief Executive Eric Yuan, in the earnings release.

ZM stock fell 6.3% to 227 in extended trading on the stock market today, pulling back from earlier gains. ZM stock fell after the company's earnings call with Wall Street analysts.

Zoom stock had retreated 28% in 2021 as investors anticipated slowing growth as the economy normalizes and more in-person meetings resume. In Monday's regular session, Zoom stock fell 3.6%.

Zoom stock faces tough year-over-year growth comparisons after the coronavirus pandemic sparked demand for its videoconferencing software last year.

Heading into its earnings report, ZM stock owned an IBD Relative Strength Rating of only 7 vs. a best-possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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