Zoom Communications, Inc. (NASDAQ: ZM) experienced a significant uptick in call options trading on November 21, 2023, as investors purchased a total of 57,201 call options. This figure marks a remarkable increase of 279% compared to the daily average of 15,087 call options, indicating heightened investor interest in the company’s future performance.
The surge in trading activity coincided with a notable rise in the company’s stock price. During trading hours, shares of Zoom Communications climbed by 14.7%, closing at $90.18. A total of 7,757,037 shares changed hands, significantly surpassing the average volume of 2,829,286. Currently, the company holds a market capitalization of $27.28 billion, with a price-to-earnings (P/E) ratio of 23.82 and a beta of 0.79.
Quarterly Earnings Exceed Expectations
On November 24, 2023, Zoom Communications reported its quarterly earnings, revealing an earnings per share (EPS) of $1.52. This figure exceeded the consensus estimate of $1.44 by $0.08. The company’s revenue for the quarter reached $1.23 billion, surpassing analyst predictions of $1.21 billion. The firm noted a return on equity of 11.91% and a net margin of 24.99%, with revenue increasing by 4.4% year-over-year. In the same quarter last year, Zoom had an EPS of $1.38. Looking ahead, the company has set its fiscal year 2026 guidance at an EPS range of 5.950-5.970 and a fourth quarter guidance of 1.480-1.490.
Insider Trading Activity and Institutional Investments
In related news, Michelle Chang, the Chief Financial Officer of Zoom Communications, sold 33,956 shares on October 10, 2023, at an average price of $82.00. This transaction totaled $2,784,392. Following this sale, Chang’s ownership dropped to 20,539 shares, valued at approximately $1,684,198, a 62.31% decrease in her stake. Another insider, Velchamy Sankarlingam, sold 7,660 shares on the same day, resulting in a total transaction of $628,120. After this sale, Sankarlingam retained 132,795 shares, valued at around $10,889,190, reflecting a 5.45% reduction in their position. Over the last ninety days, insiders have sold 389,373 shares worth approximately $32,311,579, while insiders currently own 10.78% of the company’s stock.
Institutional investors have also shown significant interest in Zoom Communications. In the second quarter, Norges Bank acquired a new position valued at about $539,998,000. Additionally, AQR Capital Management LLC increased its holdings by 23.4% in the third quarter, now owning 8,477,057 shares worth $699,357,000. Acadian Asset Management LLC raised its stake by 41.1%, holding 3,769,480 shares valued at $293,909,000 after acquiring an additional 1,097,333 shares. Vanguard Group Inc. also grew its position by 4.0%, now owning 25,937,601 shares worth $2,139,852,000.
As of now, institutional investors control approximately 66.54% of Zoom Communications’ stock, showcasing the confidence in the company’s ongoing growth and stability.
Zoom Communications, Inc. continues to provide unified communications solutions across multiple regions, including the Americas, Europe, and Asia Pacific. The company’s services include Zoom Meetings, an HD video and voice platform, Zoom Phone, an enterprise cloud phone system, and Zoom Chat for messaging and content sharing. As the company moves forward, analysts remain optimistic about its growth potential and financial performance.
