Zoom Stock Gears Up for Earnings Call

Can ZM defy its disappointing post-earnings history?

Digital Content Manager
Aug 21, 2023 at 9:39 AM
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Zoom Video Communications Inc (NASDAQ:ZM) will announce fiscal third-quarter earnings after today's close. The pandemic darling is expected to share profits of $1.05 per share, as well as an 1.4% year-over-year increase in revenue to $1.115 billion. Ahead of the opening bell, shares are up 0.4% at $66.85.

Overhead pressure at the 200-day moving average has pressured ZM since the start of the month, while a longer-term ceiling at the $76 region capped several rallies so far this year. Over the past 12 months, Zoom Video Communications stock dropped more than 35%.

The likelihood of a post-earnings surge is rather slim, based on recent history. Over the last eight quarters, ZM finished six of eight next-day sessions lower, including 16.5% drop after its March report. The shares averaged a 9.3% next-session swing over the last two years, regardless of direction, but this time around the options pits are pricing in a bigger-than-usual, near-term straddle indication of 10.7%.

Puts have been getting picked up at a quicker-than-usual clip lately. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 6.61 sits higher all annual readings.

Short sellers are firmly in control, too, despite short interest falling 10.3% in the last two reporting periods. In fact, the 17.13 million shares sold short still account for 7.5% of the equity's available float.

 

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