Zoom Communications (NASDAQ: ZM) looks to continue a long streak of beating analyst estimates for revenue when the company reports second-quarter financial results Tuesday after market close. Here are the earnings estimates, what analysts are saying ahead of the report and the key items to watch.
Zoom Q2 Earnings Estimates
Analysts expect Zoom to report second-quarter revenue of $1.27 billion, up from $1.22 billion in last year's second quarter, according to data from Benzinga Pro.
The company has beaten analyst estimates for revenue in 15 straight quarters.
Analysts expect Zoom to report second-quarter earnings per share of $1.48, down from $1.53 in last year's second quarter.
The company has beaten analyst estimates for earnings per share in nine of the last 10 quarters overall.
Zoom Analyst Ratings
BTIG analyst Allan Verkhovski expects Zoom to show strong fundamentals and acceleration in the Enterprise segment when the company reports second quarter financial results.
The analyst maintained a Buy rating with a price target of $125 ahead of the report.
"ZM shares are now up 29% YTD, which we believe has been driven by top-line acceleration, relatively low AI disruption risk, and the growing value of its stake in Anthropic (private)," Verkhovski said.
The analyst also said Zoom could highlight the financial impact of its acquisition of Common Room, an AI intelligence platform.
"Overall, we anticipate another strong quarter, and we continue to view ZM as an attractive stock to own, especially through Anthropic's IPO process."
Here are other analyst ratings on Zoom stock and their price targets:
- Cantor Fitzgerald: Maintained Neutral rating, with price target of $104
- Rosenblatt: Maintained Buy rating, with price target of $130
- UBS: Maintained Neutral rating, raised price target from $105 to $115
Zoom's consistent analyst beats and enterprise growth could be key items to watch Tuesday.
The biggest catalyst for Zoom stock is likely the quiet one and the one management won't cover a ton. Zoom invested $51 million in Anthropic back in 2023 and maintains a stake in the AI company today.
Anthropic remains one of the hottest investment stories around amid IPO speculation and a potential $2 trillion valuation.
Benzinga previously highlighted Zoom as a backdoor play for Anthropic. When Anthropic reached a $900 billion valuation in May, analysts estimated Zoom's position was worth between $4.11 billion and $11.31 billion (Wedbush) or $5.14 billion to $10.28 billion (Baird).
Baird previously called Zoom's stake a "hidden gem" and said that the stake in Anthropic could be more valuable than Zoom's revenue and AI offerings in the future.
A $2 billion valuation for Anthropic would more than double those valuation ranges to the following:
- Wedbush: $9.12 billion to $25.11 billion
- Baird: $11.41 billion to $22.82 billion
Analysts may start asking questions about the stake, what amount Zoom values it at, what the partnership looks like, and if Zoom plans on selling after a potential IPO.
In the first quarter, Zoom reported enterprise revenue up 7.2% year-over-year and online revenue up 2.8% year-over-year.
Strong growth in both these segments in the second quarter and any commentary on the Anthropic stake could provide a bullish case for the stock moving forward.
Price Action
Zoom stock is down 1.8% to $105.46 on Monday versus a 52-week trading range of $70.70 to $114.74. The company's stock price is up 22.1% year-to-date.