Zoom Stock Price on a Cliffs Edge Ahead of Q2 Earnings

Summary:

Zoom Stock (NASDAQ: ZM) heads into today's crucial second-quarter trading update at almost the same price it started the year.

Zoom Stock (NASDAQ: ZM) heads into today’s crucial second-quarter trading update at almost the same price it started the year. Later we find out if Zoom Video’s best days are behind it or the pandemic success story can continue in a post-covid world.

Nasdaq-listed Zoom Video Communications Inc was the investment success story of 2021. The video-calling company started 2020 in relative obscurity. However, as the Covid pandemic swept the globe and employees and pupils were confined to their homes, Zoom became a household name.

The speed of adoption was incredible, as was Zoom stock price performance. ZM started the year around $70, and by October 2020, it had gained a mind-blowing 730% and was changing hands at $588.84. However, by the end of last year, ZM had given back more than 40% of the gains, closing out 2020 up a respectable 273% at $337.32. However, 2021 has seen mixed results, and despite efforts to break higher, the stock has, for the most part, fluctuated on either side of the December closing price.

After the bell tonight, the stock may finally forge a direction. However, which direction will depend on the data.

Fiscal Second-quarter 2021:

Earnings per share expected at $1.16 vs $0.92 FQ2 2020

Revenue of $991.21m vs $663.52m FQ2 2020

Whilst EPS and revenue is projected to show a marked improvement on the same period last year, analysts are worried increasing costs are eating into Zooms profitability. Furthermore, a host of rivals have shot up in the last year desperate to grab a slice of the video-conferencing pie. Therefore, any slowdown in user growth could prove fatal in the near term.

ZM Price Forecast

The daily chart shows a clear trend line at $336.50, drawn from the May low. This is the first and most significant level of support. If Zoom video stock slides under $336.50, May’s $273.20 trough is an achievable downside target for the bears.

However, above the price, overcoming the 200-day moving average at $348.72 is the first test for the bulls. Following that, the 100-day at $256.60 and the 50 at $357.66 offer additional barriers. Successful clearance of the major moving averages opens the door to an extension to trend line resistance, just below $400.

Ahead of the trading update, it’s hard to give an accurate Zoom stock price prediction; Although one thing that’s almost certain is that ZM will not be at the same price as the start of 2021 for very long.