Zoom Can't Keep Up Past Growth

Today is Tuesday, November 22, 2022.

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Zoom Can't Keep Up Past Growth

It was another rough financial earnings release for Zoom Video Communications (Nasdaq: ZM), with shares dropping by 6.74% in after-hours trading on Monday.

Financials: Zoom reported earnings of $1.07 per share and revenue of $1.1 billion; both were better than expected.

Enterprising: Revenue for Zoom’s enterprise business grew 20% in the quarter.

Going Slow: Overall revenue went up 5%, which actually represents slower growth than last year. It would have been higher for Zoom if not for the impact of foreign currency. Also, online revenue declined by 9%.

Outlook: Zoom expects revenue to be between $1.095 billion and $1.105 billion in the current quarter, which is lower than what analysts expected.

Stock Price: Shares of Zoom are down 56% this year, but are mostly flat in the last 30 days.

Final Thoughts: Zoom was a darling stock pick during the pandemic, but it is now struggling to keep up the same growth. There are a lot of positives, but some investors were expecting more.

Notables

Notable Earnings Today: Best Buy (NYSE: BBY), HP (NYSE: HP), Autodesk (Nasdaq: ADSK), Dollar Tree (Nasdaq: DLTR), Nordstrom (NYSE: JWN), Dick's Sporting Goods (NYSE: DKS), Baidu (Nasdaq: BIDU), Guess (NYSE: GES), Canadian Solar (Nasdaq: CSIQ), VNET Group (Nasdaq: VNET), Analog Devices (Nasdaq: ADI), Medtronic (NYSE: MDT), Burlington Stores (NYSE: BURL), Abercrombie & Fitch (NYSE: ANF), Jack In The Box (Nasdaq: JACK), American Eagle Outfitters (NYSE: AEO), Vipshop Holdings (NYSE: VIPS), Warner Music Group (Nasdaq: WMG).

Notable IPOs Today: Adamas One Corp. Common Stock (Nasdaq: JEWL).

Notable Equity Crowdfunding Campaigns Ending Today: The Plug Drink (ALAO Invest), SecureX (StartEngine), BeerMKR (StartEngine), Boxabl (StartEngine), Avadi Engines (StartEngine), ScriptCo (StartEngine).

Notable Economic Events Today: API Weekly Crude Oil Stock (4:30 p.m. ET).

Dell's Outlook Falls Short

Photo by Dries Augustyns / Unsplash

Dell Technologies (NYSE: DELL) produced good financial earnings, but the future outlook sent the stock down 2.09% in after-hours trading on Monday.

Financials: Dell reported earnings of $2.30 per share and revenue of $24.7 billion; both were better than expected.

Records: It was a quarter of records for Dell. Operating income grew 68% to a record $1.8 billion and non-GAAP operating income shot up 22% to a record $2.4 billion. Revenue for the Infrastructure Solutions Group grew by 12% to a record revenue of $9.6 billion.

Client Problems: However, revenue for the Client Solutions Group declined by 17%.

Outlook: Dell issued revenue guidance for the current quarter that was below estimates.

Final Thoughts: Down 27% this year, Dell is trying to turn things around. While it is great that the company reduced its supply chain backlog, the conservative guidance for the current quarter is worrying some investors.

Bitcoin Hitting 2022 Lows

The price of Bitcoin dropped about 2% on Monday to one of its lowest levels all year.

Final Thoughts: A potential bankruptcy at Genesis Global Trading spooked Bitcoin and other cryptos. This was in addition to the collapse of FTX this month. It’s another reason why most investors are avoiding Bitcoin right now.

Trends to Watch

Taking on Meme Stocks: Billionaire Investor Carl Icahn Is Betting Against GameStop Shares (Bloomberg)

Infecting Stocks: Stocks Close Lower as Covid-19 Cases Rise in China (The Wall Street Journal)

More Bad Times Coming: Goldman Sachs Has Bad News For Market Bulls (TheStreet)

Betting Against Crypto: Investors Short Crypto Assets as Industry Scrutiny Intensifies (CoinDesk)

Not Happening: Paramount scraps $2.2bn sale of Simon & Schuster publishing to Penguin (The Guardian)

Zoom Can't Keep Up Past Growth