Zoom Video Stock Drops 7% Despite Earnings Beat and Strong Outlook
Zoom Video Communications (NASDAQ: ZM) turned in strong fourth-quarter and full-year fiscal 2020 results after the market closed on Wednesday.
Despite beating Wall Street's revenue and earnings consensus estimates and issuing better-than-expected guidance on both the top and bottom lines, the videoconferencing specialist saw its shares fall 6.7% in after-hours trading on Wednesday. We can probably attribute the market's initial reaction to disappointment that the outlook wasn't even better. Investors' expectations have increased significantly recently because of the fast-spreading novel coronavirus, COVID-19. The stock ran up 37% in February alone, as investors have been betting that the virus will drive increased demand for the company's videoconferencing products.
Since Zoom's initial public offering (IPO) in April at $36 per share, the stock has gained a whopping 224% through the regular trading session on Wednesday. Given Wednesday's after-hours trading action, that tally looks poised to shrink on Thursday.
Source Fool.com
