Zoom Video stock price forms double top ahead of second quarter results

Zoom Video (NASDAQ:ZM) stock price has recently fallen as the rally in US equities pauses. The stock fell to a low of around $100, which was below the July high of $123.90. This price is about 25% above this year’s low, giving it a market capitalization of over $29 billion.

Zoom Video Revenue Overview

Zoom Video is a leading technology company providing video solutions to businesses across all industries. The business has become hugely popular during the Covid-19 pandemic as businesses shifted to working from home. It has also become popular in sectors like healthcare and education.

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As a result, Zoom Video has seen its annual revenue grow from around $622 million in 2019 to over $2.65 billion in 2020 and $4 billion in 2021. More importantly, it has become a extremely profitable company as its annual profit increased from $7.6 million in 2019 to over $25 million in 2020. Its profit increased to over $1.35 billion in 2021.

Zoom Video’s stock price has underperformed in recent months as investors fret over the company’s growth. It has collapsed more than 83% from its peak in 2021.

The next key catalyst for ZM’s stock price will be the upcoming quarterly results scheduled for Monday. Analysts say the company’s revenue and earnings growth slowed in the second quarter as companies cut technology spending.

Specifically, the median estimate is that the company’s revenue grew from $1.2 billion in the first quarter to $1.12 billion in the second quarter. Its profit, on the other hand, is expected to rise from $1.03 to 93 cents in the second quarter. The stock will mainly react to the company’s forecasts, which will further illuminate the company’s growth prospects.

Zoom Video Stock Price Prediction

Stock Video Zoom

The daily chart shows that ZM stock price found strong resistance at $123.54 in July. It struggled to retest that level when it resumed this month. At the same time, stocks fell slightly below the 25-day moving average while the Relative Strength Index (RSI) fell below the neutral point at 50.

The stock is slightly above the neckline of the double top pattern at $97.31. Therefore, due to this trend, it is likely that the stock will plunge after the publication of its quarterly results. If that happens, the next key level to watch will be at $85.

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Karen J. Nelson