One-time covid darling sees shares surge on better-than-expected numbers and forecast.

Shares of video conferencing service Zoom Video Communications  (ZM) – Get Zoom Video Communications, Inc. Class A Report are targeting an important price level after the company reported better-than-expected earnings for its latest quarter and offered upbeat guidance.

Zoom posted adjusted earnings of $1.03 a share on revenue of $1.07 billion for its latest quarter, versus $1.32 a share and $960 million in the same period a year ago. Wall Street analysts had been looking for earnings of 88 cents a share on revenue of $1.07 billion.

Even better for bulls on the stock, the company projected earnings for the current quarter of 91 cents a share on revenue of $1.115 billion to $1.12 billion. 

Analysts had predicted earnings of 88 cents per share on revenue of $1.11 billion.

Shares of Zoom rose $8.60, or 9.6%, to $97.93 in after-hours trading.

Wild Ride

Zoom has had a wild ride in recent years. Shares soared during covid related lockdowns in the U.S. and elsewhere, as companies shifted to video conferencing to continue operating with their employees stuck at home. 

The stock rose 850% in 10 months before peaking in October 2020 and beginning an equally spectacular, if more painful, descent. 

As TheStreet’s Bret Kenwell pointed out ahead of Monday’s report, shares have declined in 10 of the past 11 months and in seven straight weeks. 

Kenwell said that price levels are very clear for the stock.

Given the apparently bullish reaction, post earnings, Kenwell noted that $100 is a key level to keep in mind. “Not only is it a meaningful psychological level, but it’s also a support/resistance zone, and it’s where the 10-week moving average comes into play. The 10-week has been active resistance, too — a trend that’s been in play for several quarters now.”

If the stock can push past that level, it could open the door for a move towards both its 21-week moving average and then the $125 area, he wrote