What happened

Shares of Zoom Video Communications (ZM -0.36%) popped 10% in May, according to data from S&P Global Market Intelligence. This performance is even better than it might seem at first glance because the S&P 500, including dividends, fell 6.4% last month. 

Investors have been enthused about Zoom stock from the get-go, driving its mid-April initial public offering (IPO) price up a whopping 118% -- that's more than a double -- as of June 4. 

The Silicon Valley-based company is a fast-growing provider of cloud-based video-conferencing solutions.

A desktop computer screen divided into quadrants with a person or group of people appearing in each.

Image source: Zoom Video Communications.

So what

Zoom Video didn't report earnings, nor release any other market-moving news during May. So, we can likely attribute its stock's solid performance last month to simply continued investor excitement over this newly public company's growth potential. 

ZM Chart

Data by YCharts.

Indeed, there are good reasons to like the company. It's growing fast, more than doubling its sales each year for the past two years. And -- gasp! -- it was actually profitable from a GAAP basis in its most recent fiscal year. That's quite rare for a technology IPO. 

That said, investors should exercise some caution, as Zoom stock's valuation has risen at a pace that has lived up to the company's name. Shares are trading at 61.9 times sales for the last year. 

Now what

Investors don't need to wait long for material news from Zoom Video. The company is slated to report its first-quarter results for fiscal 2020 on Thursday, June 6, after the market closes. 

Since this is its first quarterly report as a public company, it should garner an extra level of scrutiny.

For Q1 2020, Wall Street is looking for breakeven earnings per share on revenue of $117.7 million. Zoom could also provide revenue guidance for Q2 -- it's unlikely a newly public company will provide an earnings outlook. The Street is currently modeling for second-quarter EPS of $0 on revenue of $123.3 million. 

While long-term investors shouldn't pay too much attention to Wall Street's short-term estimates, they're helpful to know as they often help explain market reactions.