Please ensure Javascript is enabled for purposes of website accessibility

Why Zoom Stock Jumped Sharply on Friday

By Daniel Sparks - Jun 11, 2021 at 3:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One analyst says Zoom is his top stock pick.

What happened

Shares of Zoom Video Communications (ZM 1.35%) jumped sharply on Friday. The stock was up 5.1% as of 2:45 p.m. EDT.

Shares of the live video collaboration software provider were likely up because of a bullish note from an analyst, as well as an upbeat day in the market for many tech stocks.

A hand in a business suit draws a red upward arrow above two flat arrows.

Image source: Getty Images.

So what

RBC Capital analyst Rishi Jaluria named Zoom Video his top stock pick on Friday, giving shares a 12-month price target of $450.

The analyst believes that the company will remain integral to businesses in a post-pandemic world, thanks to differentiated technology. Jaluria is also optimistic about the company because of its strong financials. 

Bullishness for tech stocks (particularly growth tech stocks like Zoom) on Friday may have helped give the stock a boost as well.

Now what

Zoom crushed analyst estimates when it recently reported results for its fiscal first quarter, a three-month period that ended on April 30. Revenue during the quarter skyrocketed 191% year over year to $956 million. Net income for the period was $227 million.

Based on the company's outlook for full fiscal year revenue to be nearly $4 billion, Zoom management is undoubtedly confident about the company's prospects as the economy reopens.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zoom Video Communications. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
$109.52 (1.35%) $1.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.