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ZOOM VIDEO COMMUNICATIONS, INC.

(ZM)
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Cloud ramp up weighs on Oracle's profit view, shares fall

06/15/2021 | 07:02pm EDT
FILE PHOTO: The Oracle logo is shown on an office building in Irvine, California

(Reuters) - Oracle Corp on Tuesday forecast current-quarter profit below Wall Street estimates, as the business software maker ramps up investments in its cloud computing business to take on rivals including Microsoft and Amazon.com.

The company is planning to double its capital spending on the cloud segment to nearly $4 billion in fiscal 2022 as it benefits from the pandemic with businesses opting for hybrid-work models.

Increased investment in cloud, however, led Oracle to forecast first-quarter earnings per share of 94 cents to 98 cents, below expectations of $1.03, sending its shares down 4.5% in extended trading.

The company has been setting up more data centers to assist businesses as they expand operations, helping it beef up cloud offerings and win high-profile customers such as Zoom Video Communications.

Investors and analysts though still see the 45-year-old company as a niche player when compared to giants such as Alphabet Inc's Google, Microsoft and Amazon.

"The company still has a lot of work to do and progress to make before they are considered in the same category as the leading cloud infrastructure companies," said Scott Kressler, analyst at Third Bridge.

"One of Oracle's biggest issues is how small the company's revenue growth has been, despite a focus on its cloud solutions."

Oracle said it expects current-quarter revenue at its largest unit, cloud services and license support, to grow by 4%, which comes to about $7.2 billion, according to Reuters' calculations. Analysts on average expect it to be $7.36 billion.

The company posted adjusted profit of $1.54 per share on revenue of $11.23 billion in the fourth quarter ended May 31, compared with estimates of a profit of $1.31 and revenue of $11.04 billion.

(Reporting by Eva Mathews in Bengaluru; Editing by Vinay Dwivedi)


ę Reuters 2021
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Analyst Recommendations on ZOOM VIDEO COMMUNICATIONS, INC.
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Financials (USD)
Sales 2022 4 018 M - -
Net income 2022 975 M - -
Net cash 2022 3 991 M - -
P/E ratio 2022 86,9x
Yield 2022 -
Capitalization 83 395 M 83 395 M -
EV / Sales 2022 19,8x
EV / Sales 2023 16,4x
Nbr of Employees 5 725
Free-Float 69,6%
Chart ZOOM VIDEO COMMUNICATIONS, INC.
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Zoom Video Communications, Inc. Technical Analysis Chart | ZM | US98980L1017 | MarketScreener
Technical analysis trends ZOOM VIDEO COMMUNICATIONS, INC.
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TrendsBearishBearishBearish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 25
Last Close Price 280,67 $
Average target price 372,16 $
Spread / Average Target 32,6%
EPS Revisions
Managers and Directors
Eric S. Yuan Chairman, President & Chief Executive Officer
Kelly S. Steckelberg Chief Financial Officer
Harry D. Moseley Global Chief Information Officer
Brendan Ittelson Chief Technology Officer
Aparna Bawa COO, Chief Legal Officer & Secretary
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