Zoom Communications, Inc. (NASDAQ:ZM) shares are trading higher Friday after the company reported better-than-expected first-quarter financial results and raised its fiscal-year 2027 guidance above estimates. Also, the company announced its board authorized the repurchase of an additional $1.0 billion of its outstanding Class A common stock.
- Zoom shares are climbing with conviction. What’s behind ZM gains?
Q1 Highlights
Zoom reported adjusted earnings per share of $1.55, beating the consensus estimate of $1.42. In addition, it posted revenue of $1.23 billion, beating the consensus estimate of $1.22 billion and representing a 5.5% year-over-year increase.
Enterprise revenue increased 7.2% year-over-year to $755.7 million, while Online revenue increased 2.8% to $483.3 million.
Founder and CEO Eric Yuan said the company saw "continued momentum" during the quarter, highlighting growing adoption of Zoom's AI offerings.
"Customers are increasingly adopting Zoom as an AI-first system of action for modern work, with AI Companion paid users growing 184% year over year, and My Notes reaching 1.5 million licensed users within just four months of launch," Yuan said.
The company also said Zoom Customer Experience continued to deliver accelerating high double-digit growth during the quarter.
At the end of the first quarter, Zoom had 4,534 customers contributing more than $100,000 in trailing 12-month revenue, representing an 8.2% increase year-over-year.
Zoom's trailing 12-month net dollar expansion rate for Enterprise customers increased to 99% from 98% in the prior-year period.
Cash, cash equivalents and marketable securities totaled $7.7 billion as of April 30, excluding restricted cash.
Zoom also announced that its board authorized the repurchase of an additional $1 billion of outstanding Class A common stock, adding to the $625 million remaining authorization as of April 30.
Guidance
Zoom expects second-quarter adjusted earnings per share between $1.45 and $1.47, versus the consensus estimate of $1.48. In addition, it anticipates revenue of $1.26 billion to $1.27 billion, versus the consensus estimate of $1.26 billion.
Zoom also raised its fiscal-year 2027 adjusted earnings per share guidance from between $5.77 to $5.81 to between $5.96 to $6.00, versus the consensus estimate of $5.87. Zoom raised its revenue guidance from between $5.06 billion and $5.07 billion to between $5.08 billion and $5.09 billion, versus the consensus estimate of $5.07 billion.
Analyst Consensus & Recent Actions
The stock carries a Buy rating with an average price target of $104.75. Recent analyst moves include:
- Piper Sandler: Neutral (Raises Target to $107.00) (May 22)
- Mizuho: Outperform (Raises Target to $120.00) (May 22)
- Keybanc: Upgraded to Sector Weight (May 22)
Technical Picture Remains Bullish
Zoom is trading about 4.1% above its 20-day SMA ($100.61) and roughly 23.2% above its 200-day SMA ($84.97), keeping the intermediate and long-term trend pointed higher. The 20-day SMA is above the 50-day SMA, and the golden cross in May (50-day SMA moving above the 200-day SMA) reinforces that the bigger-picture trend has flipped bullish.
Momentum is more "reset than stretched" right now, with RSI at 49.77 sitting in neutral territory after earlier extremes (oversold in February and overbought in April). In plain terms, RSI helps gauge whether a move is getting overheated; here, it suggests the stock has room to move without immediately flashing an overbought warning.
- Key Resistance: $111.50 — sits right under the 52-week high area ($111.56), a zone where rallies can stall as sellers defend prior peaks
- Key Support: $87.00 — lines up near the broader moving-average cluster (around the 100-day/200-day region), a level that can act as a "line in the sand" if the trend cools
Zoom Shares Gain
ZM Price Action: At the time of publication, Zoom shares are trading 9.56% higher at $106.00, according to data from Benzinga Pro.
Image via Shutterstock
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