Zoom Communications is in the news for all the right reasons. Zoom share price is up an astonishing 37.27% as at the time of writing, as the live video platform caps a sterling performance that was boosted by increased sign-ups from remote workers and persons stuck at home during the coronavirus lockdowns.
According to earnings data released to the market on Monday, Zoom posted second-quarter adjusted earnings per share of 92 cents, meaning that the company more than quadrupled the profits for the same period the previous year. The company’s executives have also provided upbeat forward guidance for the third quarter of 2020, with expectations of adjusted EPS of 73 – 74 cents, and revenue of between $685 million and $690 million. The company also expects to exceed its annual sales forecast by $600 million. These expectations exceed the predictions of EPS of 35 cents from nearly $492 million worth of sales.
Zoom expects to land more corporate customers to its existing customer base to drive its aggressive projections. Zoom share price is now well above the $400 mark and is trading at $447.61 as at the time óf writing.
For a relatively new company which was listed on April 18, 2019 at $32 per share, the performance of Zoom’s share price has been nothing short of remarkable. The biggest concern for investors is whether the company can keep up with its performance as lockdowns end across the world. Customer retention will be critical, and this will depend on how its corporate and private clients adapt to the new normal for work and interaction.
Going by the principles of technical analysis, the steep price ascent seen on the Zoom share price is likely to be followed by a period of a pullback. This brings in Monday’s high of 325.85 as the nearest support, with 280.59 (previous high of July 13 and August 19) serving as additional support. Other targets to the south include 229.28 and 182.82.
To the upside, today’s all-time high of 478.00 marks the price to beat for bulls. Potential upside targets for bulls would be the 127.2% Fibonacci extension at 507.03 (swing from October 20, 2019 low to July 13, 2020 high), with 538.29 also forming a potential target at the 141.4% Fibonacci extension point.
