By Swissquote Analysts
Zoom stock ticks higher as earnings and forecast top expectations
Topic of the day
Zoom Video Communications Inc.’s stock rose in extended trading Monday, after the videoconferencing company beat expectations across the board with its financial results and forecasts. Zoom reported fiscal first-quarter net income of $15.4 million, or 5 cents a share, on revenue of $1.11 billion, up from $1.07 billion a year ago. After adjusting for stock compensation and other effects, Zoom reported earnings of $1.16 a share, up from $1.03 a share last year and topping analysts’ expectations. Analysts surveyed by FactSet had on average expected adjusted net income of 99 cents a share on revenue of $1.08 billion. Zoom executives stated they expect second-quarter adjusted earnings of $1.04 to $1.06 a share on revenue of $1.11 billion to $1.12 billion, while analysts on average were projecting $1.05 a share on sales of $1.11 billion, according to FactSet. For the full year, Zoom executives predicted adjusted earnings of $4.25 to $4.31 a share on revenue of $4.47 billion to $4.49 billion, while analysts on average were expecting $4.21 a share on sales of $4.45 billion. The results underscore the inherent risk/reward for services such as Zoom as more Americans return to work after teleconferencing became the norm early in the COVID-19 pandemic. Shares of Zoom popped more than 5% in after-hours trading immediately following the release of the results Monday, but ended the extended session up just 1.2%. Zoom’s stock has climbed 5% this year, while the broader S&P 500 index SPX has jumped 9%.
On Monday, the Swiss stock market closed barely holding its ground. The SMI lost 0.2 per cent to 11,553 points. Among the 20 SMI stocks, there were eleven price losers and nine price winners. 26.65 (previously: 52.42) million shares were traded. The pharmaceutical heavyweights displayed a mixed picture. While Novartis gained 0.8 per cent, Roche fell by 0.6 per cent. Nestle, also a heavyweight, dropped 0.8 per cent. Richemont rose 0.6 per cent. The company will start its share buyback on Monday, which had already been announced. Cyclicals such as ABB (-0.6 per cent), Geberit (-1.4 per cent) and Holcim (-0.7 per cent) encountered little popularity. On the other hand, bank stocks posted gains. Credit Suisse rose by 0.7 per cent, UBS by 0.5 per cent. Insurers trended heterogeneously.
European stocks traded mixed on Monday as the U.S. debt ceiling negotiations remained the main focus. The Stoxx Europe 600 index was stable at the close on Monday, at 468.9 points. In Paris, the CAC 40 and SBF 120 indexes were down 0.2 percent each. The DAX 40 in Frankfurt slipped 0.3 percent, while the FTSE 100 in London climbed 0.2 percent. In Greece, the Athex Composite index jumped 6.1% after right-wing Prime Minister Kyriakos Mitsotakis' party won a landslide victory in the parliamentary elections. The pharmaceutical company Sanofi (-1.3%) presented the results of a phase 3 trial confirming the efficacy of Dupixent in the treatment of chronic obstructive pulmonary disease (COPD) at the American Thoracic Society (ATS) congress, with simultaneous publication in the New England Journal of Medicine (NEJM). In addition, the financial rating agency Fitch has upgraded the group's credit rating from "A+" to "AA-", with a stable outlook. The Norwegian sovereign wealth fund, managed by Norges Bank, has increased its stake in the French call centre operator Teleperformance by 0.5%, according to a statement issued to the Securities and Exchange Commission. Norges Bank revealed it held 5.6% of the company's capital and 5.5% of its voting rights. Ryanair (+1.3% in Dublin) returned to profit during the year ending March 2023 and reported it was targeting modest net profit growth for the 2023-2024 financial year.
Stocks traded mixed in a tight range and bond yields rose Monday while traders awaited news from the debt-ceiling negotiations and chewed over the latest remarks from Federal Reserve officials, including from one who said he favored additional interest-rate increases. The tech-heavy Nasdaq Composite rose 0.5% to a new 2023 high, while the S&P 500 ticked 0.02% higher. The indexes are now up on the year 22% and 9.2%, respectively. The Dow Jones Industrial Average shed 0.4%, or about 140 points, to leave it up just 0.4% this year. Regional banks continued to rebound after PacWest said it sold a bundle of real-estate loans for $2.6 billion. Shares of the Los Angeles bank jumped 20%. Several lenders gained at least 3%, including KeyCorp, Regions and Comerica. Zions Bancorp’s hard-hit stock gained 4.9%. Shares of Facebook owner Meta Platforms continued to bounce back from last year’s swoon, rising 1.1% after being fined $1.3 billion by European Union regulators for sending user information to the U.S. The stock has more than doubled so far in 2023. Chevron said it would acquire smaller energy producer PDC Energy in an all-stock deal worth $6.3 billion, boosting the oil major’s position in Colorado’s Denver-Julesburg Basin and the Permian Basin in West Texas. Investors have expected consolidation in the oil patch given the mountain of money oil producers’ piled up with last year’s high energy prices. The deal was met with a ho-hum reaction from traders; Chevron’s shares fell 1.8%. Micron Technology declined 2.8% after China said it is banning major firms from buying products from the semiconductor maker.
Asian stocks were mixed on Tuesday. The Shanghai Composite is down 0.6 per cent. The Hang Seng Index in Hong Kong likewise drops by 0.6 per cent. The Nikkei 225 in Tokyo declines by 0.6 per cent. In Seoul, however, the Kospi increases by 0.6 per cent. Among individual stocks, Kuaishou Technology gained 4.7 per cent in Hong Kong. Market participants point to the results for the first quarter and the announcement of a share buyback programme.
The policy-sensitive 2-year U.S. Treasury yield advanced for an eighth straight trading session on Monday as investors and traders awaited the outcome of debt-ceiling negotiations later in the day. Meanwhile, the rate on the one-month Treasury bill soared above 5.6% as investors aggressively sold off the short-dated maturity. The 10-year Treasury note rose 4 basis points to 3.722%. The 2-year Treasury note added 8 basis points to 4.345%.
Target price Swiss Re: Barclays raises to CHF 98 (96) - Equal Weight
Target price Julius Baer: Morgan Stanley upgrades to CHF 69 (67) - Equal Weight
Target price Sonova: Deutsche Bank cuts to CHF 253 (260) - Hold
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.