By Angela Palumbo

Zoom Communications stock was down Monday after the videoconferencing company provided a disappointing first-quarter outlook.

Zoom said it expects first-quarter revenue to be between $1.16 billion and $1.17 billion, missing analysts' consensus call for revenue of $1.18 billion, according to FactSet.

Zoom also reported fourth-quarter earnings of $1.41 a share on revenue of $1.18 billion, compared to Wall Street estimates of $1.30 a share on revenue of $1.18 billion.

Shares of Zoom were falling 3.9% in after-hours trading following the report.

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Zoom Communicationa investors will be looking to see more than just an earnings beat when the videoconferencing company reports fourth-quarter financials Monday night.

Zoom is scheduled to report fourth-quarter earnings after the stock market closes on Monday. Analysts surveyed by FactSet expect the company to report earnings of $1.30 a share on revenue of $1.18 billion.

In the same period a year earlier, Zoom posted earnings of $1.42 a share on revenue of $1.15 billion.

Zoom stock soared during the Covid-19 pandemic as people around the world signed into the platform to host work meetings and connect with loved ones. It's been almost five years since Covid-19 forced people to stay at home, and shares of Zoom have fallen sharply since their pandemic peaks. The stock is down 86% from its all-time closing high of $568.34 on Oct. 19, 2020.

Now, Zoom is focusing on investing in artificial intelligence to get customers excited. This includes its AI companion, an AI assistant that does tasks like summarizing team meetings and chats.

Investing in AI isn't cheap. Zoom stock fell 6.3% on Nov. 26 after the company reported a decline in third-quarter margins from the previous year. Investors will want to see if that drop continued.

"We're investing in AI, we're investing in our emerging growth businesses and we're investing in the platform," Chief Financial Officer Michelle Chang said on the last earnings call, adding that the company gave "long-term guidance that had that operating margin lower than where we are today because of those investments."

Citi analyst Tyler Radke rates Zoom as Neutral with an $85 price target. He wrote in a note on Feb. 18 that "we struggle to find avenues for reaccelerating growth at ZM, with margins that have likely peaked."

However, businesses have been open to spending big on AI software to increase productivity. Jefferies analyst Samad Samana, who rates the stock as a Buy with a $100 price target, sees this as a potential positive for Zoom.

"We expect solid F4Q results due to continued Enterprise momentum," he wrote in a Feb. 19 research note.

Shares of Zoom were down 1.8% to $81.03 on Monday. The S&P 500 was inching up 0.2%.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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February 24, 2025 16:16 ET (21:16 GMT)

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