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Zoom’s share price rises as Q2 report is on radar

15 Aug 2022 11:54 AM

Zoom’s share price rises as Q2 report is on radar

Zoom’s share price saw a spectacular rise and fall in the past few years. The company floated on the stock market in April 2019. It was originally trading in the region of $60 per share, and the stock started to drive higher in February 2020 where it comfortably cleared the $100 mark. Most equity indices were coming under pressure until mid-March 2020 before rebounding, but Zoom’s share price was already in an aggressive upward trend – which was an indication of its popularity. The lockdowns saw most workplaces turn into ghost towns and video conferencing became the norm.

As it because apparent that lockdowns were going to be far more prolonged that originally predicted, there was an increasing amount of hype around Zoom. The stock cleared the $200 level in June 2020, and it went on to trade above $588 in October of that year – which was the all-time high. It is not uncommon for stocks to suffer painful falls following colossal rallies, and that is exactly what happened to Zoom.  By the end of 2021, Zoom’s share price has fallen below $200. In stark contrast, the NASDAQ 100 was setting record highs in December 2021. The fact the share price of Zoom topped out 14 months before the broader tech sector was an indication of how quickly sentiment had turned.

Things went from bad to worse as the stock continued to fall in 2022. Zoom’s share price jumped in the wake of its first quarter earnings being posted in May. Earnings per share were $1.03, and that easily beat the 87 cents that equity analysts were expecting. Revenue for the three-month period slipped by 12% to $1.07 billion, which was in line with forecasts. Amid the lockdowns, Zoom saw its revenue rise by triple digit percentages for five consecutive quarters, but now sales have tapered off since then. By the same token, traders’ expectations have been tempered too. Zoom issued an upbeat outlook for its second quarter, and that lifted sentiment. The group stated that it anticipates EPS to be 90-93 cents, while analysts had precited 87 cents.

The company will release its second quarter earnings on 22 August. Broadly speaking, Zoom’s share price has been trending higher for the past two months. While the stock holds above the $100.00 mark, it is possible the bullish trend will continue. A break above $124.78 could see it target $130.00. Should the stock fall from here it could find support at $96.07, and a move through that level could hit the $90.00 area.

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