Zoom up announces $1.5b share buyback
Zoom Video Communications Shares saw a nearly 13 per cent increase in premarket trading on Tuesday, following the company’s announcement of a share buyback programme worth up to $1.5 billion and the release of results that exceeded expectations, according to Reuters.
The shares of the California-based company stood at $71.10, up from Monday’s closing price of $63.12.
The video-conferencing firm, which became a favourite in the stock market during the pandemic due to the sudden shift to virtual setups by most businesses, has found it challenging to maintain that momentum since then.
Analysts at J.P. Morgan noted that the company’s shares have fallen 12.2 per cent so far this year, in contrast to the 6.3 per cent increase in the benchmark S&P 500. They added that the “clearly washed-out levels” are providing some support to the stock.
In the fiscal year ending January 31, Zoom’s shares saw a modest increase of over 6 per cent, reporting an adjusted profit per share of $1.42 and revenue of $1.15 billion, surpassing market predictions, but its sales forecast for 2025 of approximately $4.60 billion fell short of the average analysts’ expectation of $4.66 billion according to LSEG data.
J.P. Morgan analysts, who reduced the brokerage’s price target from $3 to $80 and kept a “neutral” rating, stated that the results don’t indicate a significant improvement in the business.
