As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the video conferencing industry, including Zoom (NASDAQ:ZM) and its peers.
Work is becoming more distributed, both across geographies and devices. In order for businesses to keep functioning efficiently, they need to be able to communicate as well as they did when the teams were co-located, which drives the demand for integrated communication platforms.
The 4 video conferencing stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 25.8% since the latest earnings results.
Zoom (NASDAQ:ZM)
Started by Eric Yuan who once ran engineering for Cisco’s video conferencing business, Zoom (NASDAQ:ZM) offers an easy to use, cloud-based platform for video conferencing, audio conferencing and screen sharing.
Zoom reported revenues of $1.18 billion, up 3.3% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with accelerating growth in large customers but full-year EPS guidance missing analysts’ expectations significantly.
“In FY25, Zoom AI Companion emerged as the driving force behind our transformation into an AI-first company, enabling our customers to discover enhanced productivity opportunities. As Zoom AI Companion becomes increasingly agentic, we look forward to continuing to help our customers fully realize the benefits of AI and discover what’s possible with AI agents,” said Eric S. Yuan, Zoom's founder and CEO.
Zoom delivered the weakest full-year guidance update of the whole group. The company added 93 enterprise customers paying more than $100,000 annually to reach a total of 4,088. Unsurprisingly, the stock is down 6.5% since reporting and currently trades at $75.82.
Read our full report on Zoom here, it’s free.
Best Q4: Five9 (NASDAQ:FIVN)
Started in 2001, Five9 (NASDAQ: FIVN) offers software-as-a-service that makes it easier for companies to set up and efficiently run call centers to offer more tailored customer support.
Five9 reported revenues of $278.7 million, up 16.6% year on year, outperforming analysts’ expectations by 4%. The business had a strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
Five9 scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 38.5% since reporting. It currently trades at $25.73.
Is now the time to buy Five9? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: RingCentral (NYSE:RNG)
Founded in 1999 during the dot-com era, RingCentral (NYSE:RNG) provides software as a service that unifies phone, text, fax, video calls and chat in one platform.
RingCentral reported revenues of $614.5 million, up 7.6% year on year, in line with analysts’ expectations. It was a slower quarter as it posted EPS guidance for next quarter missing analysts’ expectations significantly and a miss of analysts’ annual recurring revenue estimates.
As expected, the stock is down 18% since the results and currently trades at $25.24.
Read our full analysis of RingCentral’s results here.
8x8 (NASDAQ:EGHT)
Founded in 1987, 8x8 (NYSE:EGHT) provides software for organizations to efficiently communicate and collaborate with their customers, employees, and partners.
8x8 reported revenues of $178.9 million, down 1.2% year on year. This number was in line with analysts’ expectations. More broadly, it was a slower quarter as it recorded a slight miss of analysts’ billings estimates.
8x8 had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 40.2% since reporting and currently trades at $1.71.
Read our full, actionable report on 8x8 here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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