Hey traders, I just wanted to make sure you saw my recent sit down with the crew over at Cheddar News where we talk about the markets, the latest round of meme stocks and Zoom’s earnings. I covered the meme stocks in this morning’s article, and I wanted to follow that up with my thoughts on Zoom. You can see the interview by clicking right here.
Zoom Video Communications Inc. (Nasdaq: ZM) announced earnings came in late Tuesday. The company crushed earnings, beating consensus estimates by over 33% for the quarter. The firm reported revenue of $956.2 million, a 191% increase year-over-year.
“We kicked off the fiscal year with a very strong first quarter, posting 191% total year-over-year revenue growth combined with strong profitability and cash flow,” said Zoom founder and CEO Eric Yuan in Tuesday’s release. “With this solid start, we are pleased to raise our total guidance range.”
Usually that’s a winning combination that gives shares upside momentum. But the work-from-home stock has sold off sharply, dropping over 3% since the release. Zoom saw explosive growth through the pandemic, and fears are setting in that business is starting to slow down.
To give you an idea, Zoom’s year-over-year growth for Q4 2020 was a blistering 369%, nearly double its current gain. So, a 191% jump in revenue is a killer quarter for anyone, but those comparisons are only going to get harder for the company moving forward.
More than half of all American adults are now fully vaccinated, and more employers are asking their staff to return to the office. Apple inc. (Nasdaq: AAPL) announced on Wednesday that it wants employees back on campus three days a week by September. Fellow FAANG company, Facebook Inc. (Nasdaq: FB) reopened several offices across the country at 10% capacity in May and expects that number to hit 50% by the fall.
It’s incredibly tough for growth stocks right now. You can beat earnings top to bottom, do a stock buyback, announce the greatest outlook in the history of the world and get beat down.
As a trader that’s why it’s always important to use proper risk management and resist falling in love with a position at all costs. That’s the best way I know to stay nimble so that I can put my money to work where it can have the biggest possible impact.
By the way, I’m going to occasionally send out bonus trades to my most active members. And I plan to send a trade this weekend. If you want me to forward it to you, reply back to this email and let me know!
Disclaimer & Disclosures The information in this email is intended for informational purposes only and does not guarantee specific results as there is a high degree of risk involved with trading. Also, our traders are real traders and may have financial interests in the companies discussed. Please see our Terms and Conditions for more information.
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