It’s Zoom’s moment of truth.
The stay-at-home game will report gains after the bell Monday, the next catalyst for a stock that has fallen out of favor this year after rising nearly fivefold in 2020.
“I’m not sure if it’s Zoom or Boom,” Craig Johnson, chief market technician at Piper Sandler, told The Washington City Times’s “Trading Nation” on Friday. “The stock has had a massive run in 2020. It’s been basing for months now.”
In a separate email to The Washington City Times, Johnson said the options market is implying a 9% upward or downward move, a key move for a stock that has stalled in recent months. Zoom hasn’t seen a move of that magnitude since March.
Johnson says it pays to take a wait and see approach on this stock.
“I’m going to wait for the stock to see if we can technically recapture this 50 and 200 day moving average. While our fundamental analyst likes it, I’m waiting to see if we can get back above that level at about $365, so I’m a hold on this post in print,” he said.
Zoom closed at $340.81 on Friday. The stock would need to gain 7% to reach that level.
But Federated Hermes portfolio manager Steve Chiavarone sees major headwinds for Zoom and other similar stocks.
“All the indications seem to be pointing to a possible spike in the delta and we think once those cases start to peak, stocks will sniff that and the reopening of trades – things like casinos, things like hotels, things like airlines – will drop. get a big relief rally. That’s where we find more opportunities,” he said during the same interview.
Zoom is expected to report $1.16 a share of earnings in the second quarter of July, according to FactSet estimates, up from 92 cents a share a year earlier. Sales are expected to have increased by almost 50%.