ZOOM Video Share Price: What to Expect From Next Week's Earnings

Summary:

The Zoom Video share price is expecting big things from next week's earnings. ZM has risen +20% in two weeks ahead of the June 1st release.

The ZOOM Video share price is expecting big things from next week’s earnings. ZM has risen +20% in two weeks ahead of the June 1st release.

We all know the story of ZOOM video. Relatively unknown before the Covid-19 pandemic. The stock was one of the few beneficiaries of the virus.

In 2020, ZM experienced parabolic user growth. For workers and students confined to their homes, ZOOM became the must-have technology for communicating with colleagues, clients, and teachers.

Just as google’s saturation has people ‘googling’ instead of ‘using a search engine, Zoom quickly became synonymous with video calling.

At its October 2020 peak, The ZOOM Video share price had gained +730% since the start of the year. However, Since setting the record of $588.50, the stock has been in a prolonged downtrend.

Yesterday’s closing price of $326.66 was the same level ZOOM was trading in August of last year.

As the world slowly returns to schools and offices, Zoom desperately needs to remind investors that it remains as relevant as ever.

ZOOM Q1 Earnings

As I said, expectations are high for the June 1st data release.

First-quarter earnings are expected to be $0.99 per share. Vs. EPS of $0.20 in the same period last year.

Subsequently, analysts predict Q1 revenue of $905 million, around $175% higher than the same period last year.

The share price is currently poised for a big move in either direction, depending on how investors digest next week’s data.

ZOOM Technical Outlook

As we can see on the daily chart, The price has been in a descending channel for the last seven months.

Both sides of the parallel channel have been tested during this period. The most recent was earlier this month.

The ZOOM Video share price broke below the lower end of the channel at $276.70 on May the 10th. However, it quickly recovered and is currently trading in the middle of the formation at $326.66.

Just above the price, at $332.00, is a descending trend line in place from early March. This should be seen as the first area of resistance.

Above that, the 200-day Moving Average is $348.30. This becomes the second, more important resistance level.

Below the market, we see the 100 DMA at $318.79 and the 50 DMA at $313.03. These averages provide a strong band of support on the downside.

The potential for a big move in the share price will come on a break of either the support or the resistance levels. Which of those it is should become clear a few days.