Zoom Is Zooming, But This Health-Tech Stock Is Doing Even Better

The stock market managed to post some gains to start the new week, although major market benchmarks finished well off their highs of the day. The Nasdaq Composite (^IXIC -0.64%) led the way higher with gains of more than half a percent, but the S&P 500 (^GSPC -0.46%) and Dow Jones Industrial Average (^DJI -0.98%) had to settle for smaller rises on Monday.

Data source: Yahoo! Finance.

After the closing bell, though, positive financial results lifted some stocks. In particular, shares of Zoom Video Communications (ZM -0.99%) were notably strong performers, posting solid gains as investors look for the video conferencing specialist to bounce back. And an even bigger rise in shares of health-tech company Progyny (PGNY -0.31%) raised awareness of a company many haven't followed closely.

The show goes on for Zoom

Shares of Zoom Video Communications were up 8% in after-hours trading on Monday. The mainstay of pandemic-era communication stocks reported fiscal fourth-quarter results for the period ending Jan. 31 that gave investors more confidence in its ability to keep moving forward.

Zoom's numbers showed solid growth, albeit at rates not even close to what the video communications specialist achieved in recent years. Total revenue climbed 4% year over year to $1.12 billion, closing a year of 7% sales growth.

Adjusted net income was 7% lower than prior-year levels at $367 million, but a decrease in share count limited the drop in adjusted earnings per share, which came in at $1.22. Full-year fiscal 2023 adjusted earnings of $4.37 per share were down about 14% from fiscal 2022's final bottom-line figures.

Zoom did see more strength in its enterprise segment, which has proved crucial as casual users haven't been as loyal in remaining with the service as various businesses and social venues have reopened. Zoom served 213,000 enterprise customers, up 12% from 12 months ago, and those customers had a net dollar expansion rate of 115%.

Zoom has 3,471 customers contributing at least $100,000 annually to its revenue, up 27% from the same period a year ago. Enterprise segment revenue climbed 18% for the quarter and 24% for the full year, showing that Zoom's overall strategy still makes sense.

Investors seemed to like Zoom's outlook for fiscal 2024, even though it projected revenue growth of just 1% and a drop in adjusted earnings to between $4.11 and $4.18 per share. With the stock having plunged from its highs, however, much of the slowdown is already reflected in the share price, and that could justify greater optimism about Zoom's long-term prospects.

Progyny looks healthy

Meanwhile, shares of Progyny were up 14% in after-hours trading. The provider of fertility and family-related benefits solutions had massive growth in its revenue during 2022, and investors liked those gains as well as performance on its bottom line.

Progyny's numbers were generally good. Revenue of $214 million was higher by 68% from year-ago levels. Even though net income fell sharply, adjusted pre-tax operating earnings of $33 million were more than double what Progyny posted in the fourth quarter of 2021.

Both Progyny's fertility benefit and pharmacy benefits services divisions showed impressive growth rates, and customer counts jumped by more than half over the past 12 months as the company served almost 4.56 million members as of the end of 2022.

Progyny believes that macroeconomic trends will keep supporting its growth into 2023. For the full year, the company hopes to break the $1 billion mark in revenue, with earnings of $0.26 to $0.32 per share and a sizable jump in adjusted pre-tax operating earnings. Margin expansion also looks promising.

Last year wasn't kind to Progyny's stock, but investors hope that the tide is turning for the company. Based on its most recent results and its outlook, it might finally give shareholders the results they've been looking for.