Zoom Gears Up to Post Q1 Earnings: What's in Store for the Stock?

Zoom Communications ZM is scheduled to report its first-quarter fiscal 2026 results on May 21.Zoom expects first-quarter fiscal 2026 revenues between $1.162 billion and $1.167 billion. Non-GAAP earnings per share are expected in the range of $1.29-$1.31.The Zacks Consensus Estimate for ZM’s first-quarter fiscal 2026 revenues is currently pegged at $1.16 billion, indicating a 2.03% increase from the year-ago quarter’s reported figure.The consensus mark for earnings is pinned at $1.30 per share, which has remained unchanged over the past 90 days. The figure suggests a 3.70% decrease from the year-ago reported figure.ZM surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with an average surprise of 10.33%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)Zoom Communications, Inc. Price and EPS Surprise Zoom Communications, Inc. price-eps-surprise | Zoom Communications, Inc. QuoteLet us see how things are shaping up for the upcoming announcement.Factors to ConsiderThe expansion of Zoom’s AI Companion capabilities is anticipated to have played a major role in boosting the company’s top-line performance. With the launch of AI Companion 2.0 and the rollout of the customizable add-on in April, Zoom began to monetize its agentic AI features. These innovations are likely to have improved customer stickiness and platform engagement in the quarter under review, directly benefiting the top line.Enterprise is expected to have continued being the dominant growth driver. In the fourth quarter of fiscal 2025, enterprise revenues grew 6% year over year and accounted for 60% of total revenues. The number of customers generating over $100,000 in trailing 12-month revenues grew 7% year over year, while churn rates reached record lows. This trend is expected to have persisted in the to-be-reported quarter, supported by continued momentum in Zoom Phone, Contact Center, and Workvivo, particularly as large deals likely ramped up.The Online business segment, which includes SMB and individual customers, is expected to have remained flat to slightly down during the quarter. This performance reflects ongoing stabilization trends, including record-low churn levels achieved in the previous quarter. In contrast, Zoom’s Enterprise segment is anticipated to have carried the bulk of the growth in the fiscal first quarter. Large deal wins, such as the deployment of Zoom solutions to Amazon employees and Delta Airlines' adoption of Workvivo, is expected to have reinforced the platform’s relevance and appeal to upmarket clients.From a bottom-line perspective, strategic investments in AI are expected to have weighed on gross margins, though the company remains committed to achieving long-term efficiency gains. Zoom’s federated AI approach and infrastructure optimization efforts are expected to have helped offset these costs in the fiscal first quarter, keeping operating margins stable near 39%. Additionally, free cash flow in the quarter under review is expected to have been impacted by timing differences, tax conditions and changes in interest rates.What Our Model Says for ZMPer the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.ZM currently has an Earnings ESP of -1.68% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Stocks to ConsiderHere are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:NVIDIA NVDA currently has an Earnings ESP of +3.87% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.NVDA shares have gained 0.8% in the year-to-date (YTD) period. It is slated to report its first-quarter fiscal 2026 results on May 28.Ralph Lauren RL has an Earnings ESP of +2.72% and a Zacks Rank #3 at present.RL shares have gained 18.9% YTD. It is scheduled to report its fourth-quarter fiscal 2025 results on May 22.Amer Sports, Inc. AS has an Earnings ESP of +1.06% and a Zacks Rank #3 at present.AS shares have gained 11.4% YTD. It is scheduled to report its first-quarter 2025 results on May 20.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.0% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Ralph Lauren Corporation (RL): Free Stock Analysis Report Zoom Communications, Inc. (ZM): Free Stock Analysis Report Amer Sports, Inc. (AS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks