What happened

Shares of Zoom Video Communications (ZM 0.15%) slumped on Tuesday, falling as much as 14.9%. As of 10:52 a.m. ET, the stock was still down 12.47%.

The catalyst that sent the teleconferencing stock lower was the company's quarterly financial report, which was a mixed bag.

So what

For the fiscal 2023 second quarter (ended July 31), Zoom reported revenue of $1.1 billion, up 8% year over year -- its fifth consecutive quarter of at least $1 billion in sales. However, the company cited the strengthening dollar as weighing on its revenue growth, causing non-GAAP earnings per share (EPS) of $1.05, down 23%. 

Analysts' consensus estimates were calling for revenue of $1.1 billion and EPS of $0.94. 

Management said the company made progress on a number of fronts, which it believes will power future results. The company's recently launched Zoom Contact Center and Zoom IQ for Sales "saw some great early wins," said CEO Eric Yuan. At the same time, Zoom Phone hit a milestone, securing a record number of licenses during the quarter and surpassing 4 million seats, up 100% year over year. The company also saw "continued momentum" from its enterprise customers.

Now what

Management lowered its outlook for the full fiscal year, which likely added fuel to today's sell-off. The company now projects revenue of roughly $4.39 billion at the midpoint of its guidance, down from its previous forecast of $4.54 billion. The lower guidance spread to the bottom line as well: Zoom now expects EPS of $3.68 at the midpoint of its guidance, down from its previous forecast of roughly $3.74.

Given the prevailing and challenging macroeconomic headwinds -- particularly those facing small and medium-sized businesses -- it isn't too surprising to see Zoom's results take a short-term hit.

However, Zoom's industry-leading position and consistent innovation suggest the company has more room to run. Furthermore, at just 5 times forward sales, the stock is trading near its lowest valuation ever. For investors with the appropriate multiyear time horizon, Zoom stock is still a buy.