Why Zoom Video Communications Stock Dropped Today
Shares of videoconferencing star Zoom Video Communications (NASDAQ: ZM) tumbled 5.5% in early trading on the Tuesday, before clawing their way back to about a 1.5% decline as of 12:15 p.m. ET. The strange thing is, Zoom just beat expectations in its earnings report yesterday.
Heading into its fiscal second quarter of 2024, ended July 31, analysts had forecast that Zoom would earn only $1.05 per share, adjusted for one-time items, on sales of just over $1.1 billion. Zoom nailed the sales target -- actually even edged it out a bit -- and crushed on earnings, delivering pro forma profits of $1.34 per share.
So why is Zoom stock down today? Well, let's see here. Sales of $1.14 billion beat expectations, but still rose less than 4% year over year -- not great for a growth stock, if that's how investors still view Zoom post-pandemic. And while Zoom reported $1.34 pro forma, its profits per diluted share as calculated according to generally accepted accounting principles (GAAP) were only $0.59 per share -- less than half the headline figure.
Source Fool.com
