Zoom Video Communications (NASDAQ:ZM) sheds US$1.1b, company earnings and investor returns have been trending downwards for past year

It's no secret that every investor makes bad investments from time to time. But serious investors should think long and hard about avoiding extreme losses. So consider the longtime shareholders of Zoom Video Communications, Inc. (NASDAQ:ZM); The stock price has fallen a whopping 73% over the past 12 months. While some investors are willing to take that kind of loss, they're usually professionals who spread their bets thin. Longer-term shareholders haven't suffered as badly, as the stock has fallen a comparatively less painful 4.6% in three years. The declines have accelerated of late, with the stock price falling 35% over the past three months.
After losing 4.6% over the past week, it's worth examining the company's fundamentals to see what we can infer from past performance.
Check out our latest analysis for Zoom Video Communications
ADVERTISEMENT
To quote Buffett, "Ships will sail around the world, but the Flat Earth Society will thrive. There will continue to be wide discrepancies between price and value in the market..." One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS ) consider.
Unfortunately, Zoom Video Communications reported a 3.9% EPS decline for the past year. The 73% stock price decline is actually more than the EPS decline. This suggests that the drop in earnings per share has made some shareholders more nervous about the deal.
Below you can see how the EPS has changed over time (discover the exact values ​​by clicking on the image).
Earnings per share growth
We are pleased to report that the CEO is paid more modestly than most CEOs of similarly capitalized companies. But while CEO pay is always worth checking out, the really important question is whether the company can grow profits going forward. It might be worth taking a look at our free Zoom Video Communications Earnings, Earnings, and Cash Flow report.
ADVERTISEMENT
A different perspective
The past 12 months have not been good for Zoom Video Communications stock, which underperformed the market and cost holders 73%. The market lost about 19%, which undoubtedly weighed on the share price. The three-year loss of 1.5% a year isn't as bad as it has been over the past 12 months, suggesting the company hasn't been able to convince the market that it's solved its problems. We would be wary of buying into a company with unresolved problems, although some investors will invest in struggling stocks if they think the price is sufficiently attractive. Before you decide if you like the current stock price, check out how Zoom Video Communications performs on these 3 valuation metrics.
But note: Zoom Video Communications might not be the best stock to buy. So take a look at this free list of interesting companies with past earnings growth (and future growth projections).
Please note that the market returns reported in this article reflect the market-weighted average returns of stocks currently traded on US exchanges.
ADVERTISEMENT
Do you have any feedback about this article? Concerned about the content? Contact us. Alternatively, send an email to the editorial team (at) simplywallst.com.

This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
Join a paid user research session
You will receive a $30 Amazon Gift Card for 1 hour of your time and help us create better investment tools for individual investors like you. Sign up here
ZM
-1.84%
recommendation rating
Stop

Last News

Jennifer Lawrence Lists Her New York City Loft for $10.5M

Jennifer Lawrence Lists Her New York City Loft for $10.5M

Jennifer Lawrence Lists Her New York City Loft for $10.5M

Jennifer Lawrence Lists Her New York City Loft for $10.5M

Oregon liquor store thefts up 450% in recent years as store owners 'shout from the rooftops' for help

Taylor Swift's Longtime Friend Abigail Anderson Marries Charles Berard