Zoom's Uninspiring Outlook

And, Palo Alto Networks billings guidance.

May 21, 2024

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Today is Tuesday, May 21, 2024.

The Early Bird Index today is 73.28.

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Zoom's Uninspiring Outlook

Zoom Video Communications (Nasdaq: ZM) reported good financial results on Monday, and yet the stock ticked down by 1.15% in after-hours trading.

Financials: Zoom reported earnings of $1.35 per share in the past quarter and revenue of $1.14 billion; both were better than expected.

Details: In the past quarter, revenue grew by 3.2% year-over-year, enterprise revenue increased by 5.3%, the operating margin jumped by 17.8%, and cash flow soared by 40.6%.

Outlook: Zoom expects revenue to be between $1.145 billion and $1.150 billion in the current quarter. This was a little light and some investors expected more growth.

Stock Price: Zoom is down 7% this year, although the stock is up in the last 30 days.

Final Thoughts: While the results were good for Zoom, investors wanted a stronger outlook.

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Notables

Notable Earnings Today: Toll Brothers (NYSE: TOL), Macy's (NYSE: M), Lowe's (NYSE: LOW), AutoZone (NYSE: AZO), Urban Outfitters (Nasdaq: URBN), Modine Manufacturing (NYSE: MOD), Viasat (Nasdaq: VSAT), Eagle Materials (NYSE: EXP), Skyline Champion (NYSE: SKY), Alvotech (Nasdaq: ALVO), BiomX (NYSE American: PGHE), Eagle Point Credit Company (NYSE: ECC), Full Truck Alliance (NYSE: YMM), PropertyGuru Group (NYSE: PGRU), XP (Nasdaq: XP), XPeng (NYSE: XPEV), ZIM Integrated Shipping Services (NYSE: ZIM).

Notable IPOs Today: Roundhill GLP-1 & Weight Loss ETF (Nasdaq: OZEM).

Notable Equity Crowdfunding Campaigns Ending Today: N/A.

Notable Economic Events Today: N/A.

Palo Alto Networks Billings Guidance

Despite posting good financial results on Monday, shares of Palo Alto Networks (Nasdaq: PANW) declined by 8.70% in after-hours trading.

Financials: Palo Alto Networks reported earnings of $1.32 per share in the past quarter and revenue of $2 billion; both were better than expected.

Details: Revenue grew 15% in the past quarter.

Yes, But: The cybersecurity company’s guidance for billings in the current quarter was weaker than expected. Palo Alto Networks only anticipates billings to grow between 9% and 10% in the current quarter.

Stock Price: Palo Alto Networks was up 12% in 2024 before these results. Most of that growth came in the last 30 days.

Final Thoughts: Cybersecurity is an odd area of the market right now. It is important and growing, but there’s also a lot of consolidation. The billings guidance from Palo Alto Networks is a problem for the entire industry as other cybersecurity stocks also fell in after-hours trading on Monday.

Ethereum’s Spot ETF Speculation

The price of the cryptocurrency Ethereum jumped 20% on Monday after analysts from Bloomberg increased their odds of a spot Ethereum ETF (exchange-traded fund) getting approved in the U.S. from 25% to 75%.

Final Thoughts: Ethereum is now up over 50% in 2024.

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The contents of Early Bird are intended for informational and entertainment purposes only. They do not constitute trade or investment recommendations and they are not financial or legal advice. Readers are encouraged to consult licensed professionals for personalized guidance regarding their financial or legal situations.