Zoom Unveils Aggressive Buybacks After Posting a Strong Earnings Report
In Q4, the company posted revenue of $1.15 billion, which came in higher than estimates of $1.13 billion. Adjusted EPS of $1.22 was also higher than Wall Street projections of $1.15. On a year-over-year basis, revenue was up by less than 3%, but the big improvement was on the bottom line with net income of $298.8 million being a big improvement from the $104.1 million net loss that Zoom reported in the prior-year period.
The company has been showing that its business remains resilient despite rising competition. And in light of the strong results and the confidence in its business, the company’s Board of Directors also authorized a stock buyback program worth up to $1.5 billion. That’s positive news for investors as it can help give the stock some much-needed support, and potentially lead to some bullishness.
While news of the strong earnings performance did help lift the stock’s shares, Zoom’s stock price is still down 5% over the past 12 months. It trades at a fairly modest 14 times estimated future earnings and is a potentially good value buy for long-term investors.
With improved margins, this is a much safer stock to be holding than it has been in the past. Zoom has proven that it isn’t going anywhere, and this can be an excellent investment to add to your portfolio.
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