He maintained his Hold rating on Tuesday as he waits to see whether online sales will stabilize and what revenue contribution new products will make. Meanwhile, Ryan Koontz of Needham is yet to make a move. He also downgraded the stock from Neutral to Sell. Last week, he cut his price target from $99 to $91.
Rackle further lowered his price target on Tuesday from $91 to $76. This marks the sixth consecutive quarter that revenue growth has decelerated year over year.Ĭiti’s Tyler Radke maintained his Sell rating on the stock and says the revised guidance “could be too optimistic after the underperformance in Q2.” He bases his argument on the weakening macroeconomic environment and the shifting buying patterns of consumers that could further disrupt customer growth in the online segment.
Sales climbed 8% to $1.1 billion for three months ended in July compared to last year’s period. The company witnessed tremendous growth during the peak of the pandemic in 2020 as demand for video conferencing boomed however, those days are now a thing of the past. The company released a statement blaming its performance on its online, a segment most focused on smaller businesses and the consumer, which witnessed weaker new customer additions in the second fiscal quarter. The company also lowered its sale outlook for the year to between $4.49 billion and $4.40 billion, a figure lower than Wall Street’s estimate of $4.51 billion and down from a previous call of up to $4.55 billion.
Management had previously set its estimation for the full year’s earnings at $3.77 a share. The company released projected earnings on Monday between $3.66 and $3.69 per share for the full fiscal year, lower than Wall Street’s forecast of $3.78 a share. Zoom stock (ticker: ZM) dived roughly 16%, landing at $82.34 in recent trading on Tuesday. Zoom Video Communications’ stock declined Tuesday as the market attempted to make sense of the latest results, and Citi said the company’s lowered outlook might still be a little too good to be true.
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