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Zoom in Focus Today

As we round out the final days of the Q4 2022 earnings season, Zoom Video Communications will be in the spotlight today. The company is due to report against Wall Street forecasts of EPS of $0.81 on revenues of $1.1 billion. However, there has been some market chatter regarding the potential for a negative EPS which, if seen, would be a heavy blow for the company and likely see shares come off sharply today.  Given the weak expectations, however, any surprise upside today will be strongly bullish for the stock.
 

Post-Pandemic Demand Drop

The company has struggled over the last year or so as the post-pandemic recovery has seen a drop in demand for its video-conferencing products. With companies and schools seeing a broad return from WfH conditions, demand has dried up steadily, reflected in projections for today’s EPS to be just half of the $1.60 figure seen a year prior.
 

Uncertain Outlook

Looking ahead, traders will also be focused on how Zoom views the outlook for 2023. This month the company announced that it will reduce its workforce by around 15% in line with the “uncertainty of the global economy”. Traders will now be keen to hear further details with downside risks should CEO Eric Yuan strike a cautious tone.
 

Technical Views

Zoom

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Following heavy declines over the last year, Zoom shares have recently stalled along support at the 63.39 level, forming a range between that support level and resistance at 85.67. For now, the focus remains on an eventual break lower in line with the long-term bear trend. To the topside, bulls need to see a break of 85.67 to open up a test of the 96.05 level above. 

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