ZM
The beat was real. The celebration was not.
Zoom came in with a clean Q2 beat: revenue of $1.28 billion vs. the $1.27 billion Wall Street was looking for, and adjusted EPS of $1.55 vs. $1.48 expected. On paper, that’s the kind of print that should earn you a polite nod and maybe a tiny confetti pop.
Then came the guidance gremlin
The problem? Zoom’s third-quarter outlook was a little soft around the edges. Management said revenue should land between $1.275 billion and $1.28 billion, which is just under the $1.282 billion analysts were modeling. EPS guidance of $1.46 to $1.48 also came in a hair below the $1.50 consensus.
That was enough to cool the stock, which dropped 7% to $93.89 on Wednesday. In other words: the market is acting like a picky food critic — yes, the meal was good, but what’s on the next plate?
The AI story is doing a lot of work here
CEO Eric Yuan leaned into the company’s AI-first customer experience pitch, saying the portfolio is scaling and Zoom Virtual Agent customer counts jumped 256% year over year. That’s the kind of growth detail investors want to hear because it hints Zoom’s story is evolving beyond the old-school video-call box.
Analysts mostly stuck with their ratings after the print:
- Jefferies trimmed its price target from $118 to $116 but kept a Buy
- RBC held Outperform with a $130 target
- BTIG kept Buy at $125
- Needham stayed Buy at $130
- Cantor Fitzgerald held Neutral with a $104 target
Big picture: Zoom still has real business momentum, but after the pandemic-era rocket ride, the market is now grading every quarter like a final exam.