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Zoom Video Communication (ZM) Stock: Is ZM Stock Worth A Buy?

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Zoom Video Communication (ZM) Stock: Is ZM Stock Worth A Buy?
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Zoom (ZM) stock has been stuck in a narrow consolidation zone ranging between $64.40 and $74 since the start of July 2023. The bullish move was halted as the stock price reached near $74. ZM stock price retraced and formed support at $64.40. 

On 18 August 2023, the video communication company released the second quarter financial result which re-ignited the bullish momentum in the price. The stock price has surged roughly 14% since the release of the positive quarterly report. 

Source: ZM Stock Price By TradingView.

The last candle closed as a bullish candle which was successful in breaking the resistance level of $74 but did not close above it. The candle left a long wick to the upside indicating rejection. 

If the next candle is successful in breaking the high of the last candle and closing above $74, the ZM stock price might rise toward the next resistance level of $80.80. On the other hand, if ZM stock price breaks the low of the last candle, it might melt down toward the recent support of $64.40. 

Quarterly Report Analysis of Zoom

The stock price has trended higher since the release of a second-quarter report on 21 August 2023. Zoom reported quarterly earnings of $1.34 per share which beat the analyst estimate of $1.07, an increase of 27.62% over the earnings of $1.05 per share from the same period last year. 

The consensus estimated the revenue to be $1.114 Billion, while it turned out to be $1.139 Billion. The company issued the third quarter guidance with the earnings per share in a range between $1.07 and $1.09, against the estimate of $1.03. The total revenue is expected to be between $1.115 Billion and $1.12 Billion against the estimate of $1.13 Billion. 

Zoom AI companion is now included at no additional cost to paid Zoom user accounts. “Zoom IQ for sales“ will be renamed to “Zoom revenue accelerator”. 

Will ZM Stock Price Reach $80?  

Zoom Video Communication (ZM) Stock: Is ZM Stock Worth A Buy?
Source: ZM Stock Price By TradingView.

The stock price has surged above 20, 50, and 100-day EMAs, which indicates a rise in bullish momentum but traders should be aware that it faced strong rejection from 200-day EMA on 5 September, 2023. 

Chaikin money flow (CMF) score has finally climbed above the 0 mark after hovering below it for more than 20 days, indicating slight strength in the market. RSI stands at 65.66, suggesting strong bullish momentum. 

Conclusion 

Technical parameters favor the buying side. The market structure and price action of the Zoom video communication stock is strongly bullish but traders should wait for the candle to close above $74.

Technical Levels
  • Major support: $64.40 and $62.50 
  • Major resistance: $80.80 and $85

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

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