(Reuters) – Zoom Video Communications’ shares gained nearly 13% in premarket trading on Tuesday after the company delivered better-than-expected results and announced a share buyback of up to $1.5 billion.
Shares of the California-based company were at $71.10 after closing at $63.12 on Monday.
The video-conferencing company was a stock market darling during the pandemic when most businesses adopted virtual setups almost overnight but has struggled to build on since.
The company’s shares are down 12.2% year to date compared to the 6.3% rise in benchmark S&P 500, and the “clearly washed-out levels” are proving some support to the stock, analysts at J.P. Morgan said.
Zoom shares had gained just over 6% last year.Zoom posted an adjusted per-share profit of $1.42 on $1.15 billion revenue – both above market expectations – in its fiscal fourth quarter ended January 31.
However, its fiscal year 2025 sales forecast of about $4.60 billion fell short of analysts’ average expectation of $4.66 billion, according to LSEG data.
Analysts at J.P. Morgan, which lowered the brokerage’s price target by $3 to $80 and maintained a “neutral” rating, said the results do not convey a materially improving business.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Tasim Zahid)
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