Zoom Video Communications (ZM 0.10%) rewarded shareholders who bought the stock prior to the pandemic, returning 391% in 2020. The company was a clear beneficiary of the work-from-home environment, a trend that is still very evident today. Bureau of Labor statistics released in January, 11% of workers were still teleworking as of December 2021.
- 18 Wall Street equities research analysts have issued “buy,” “hold,” and “sell” ratings for Zoom Video Communications in the last twelve months.
- There are currently 2 sell ratings, 11 hold ratings and 5 buy ratings for the stock.
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- And the outlook for ZM stock is tied to whether the company morphs into a broader business communications platform.
Zoom is also the focus of several ongoing federal investigations related to its dealings with Beijing, according to the Journal. As mentioned above, on Sept. 30, 2021, Five9 announced that the two parties had mutually agreed to abandon the deal. The company said that the agreement had not received the required number of votes from Five9 shareholders to approve the merger. Earlier in September, The Wall Street Journal reported that a U.S. Department of Justice-led panel, named Team Telecom, was investigating the proposed merger’s potential national security risks.
ZM vs App Stocks
Most company’s employees are working from home and there is limited contact between businesses dealing with one another. A combination of these factors and the likelihood of social distancing lasting throughout 2022 could boost Zoom’s revenue accordingly. Options are a riskier asset compared to just trading the stock, but they have higher profit potential. Serious options traders manage this risk by educating themselves daily, scaling in and out of trades, following more than one indicator, and following the markets closely. For fiscal 2025, Zoom said it expects earnings of $4.86 per share at the midpoint of its outlook vs. estimates of $4.66 per share.
Other competitors are unified communications as a service (UCaaS) and legacy private bank exchange (PBX) providers such as 8×8 Inc. (EGHT), Avaya Holdings Corp. (AVYA), and RingCentral Inc. (RNG). Zoom Video Communications Inc. (ZM) offers a video-first communications platform used by millions of people worldwide for both business and personal use. The platform connects people via video, phone, chat, and content sharing and can be integrated across a broad range of devices.
The virus has caused many to work remotely, creating a larger demand for conferencing tools that enable workers and teams to keep in touch and continue collaborating. Here, Zoom makes a clear distinction between meeting packages and conferencing packages. A room in currently £39.00 per month per room, and works as an bitbuy canada review ideal solution for larger companies who regularly host conferences. Zoom’s valuation has surely contracted, but it’s still not desirable when observing the company’s peer group. Given the expected slowdown in Zoom’s growth, I think it’s safe to say that the company is still trading at expensive valuation multiples.
In the business market, Zoom rivals include RingCentral (RNG), Cisco Systems (CSCO), Google and others. Growth in annual recurring revenue for business customers with contracts topping $100,000 is fxcm review one metric to monitor. Zoom Video Communications’ stock is owned by many different institutional and retail investors. Top institutional shareholders include Avondale Wealth Management (0.00%).
The recent coronavirus pandemic has resulted in the demand for Zoom’s product and services to skyrocket, resulting in a share price to reflect this increased demand. Zoom is currently trading at an overvalued rate, with its 12-month-trailing P/E ratio approximately 444x times its EPS. However, if the company keeps building upon its financial results and gains bdswiss forex broker review market share in the video conferencing industry, it could result in a promising future for the relatively new company. Zoom is a cloud-based conferencing software that can be used via your browser, desktop or mobile application. Zoom enables users to virtually interact with contacts when a physical meeting is not possible, such as if you work remotely.
For better or worse, Zoom has become synonymous with the pandemic. Its rise to prominence and the resulting performance were tied to a massive need for video communications at the height of lockdowns. This demand pulled forward a ton of growth and warped some investors’ views of the company’s fundamentals. Zoom’s cloud-based software sets up video calls, with chat tools available. With around half of Fortune 500 companies reportedly using Zoom in 2019, it’s no surprise that Zoom’s stock price has risen drastically since the outbreak of Covid-19.
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This suggests a possible upside of 21.9% from the stock’s current price. View analysts price targets for ZM or view top-rated stocks among Wall Street analysts. 18 Wall Street equities research analysts have issued “buy,” “hold,” and “sell” ratings for Zoom Video Communications in the last twelve months. There are currently 2 sell ratings, 11 hold ratings and 5 buy ratings for the stock. The consensus among Wall Street equities research analysts is that investors should “hold” ZM shares. A hold rating indicates that analysts believe investors should maintain any existing positions they have in ZM, but not buy additional shares or sell existing shares.
What Analysts Are Saying About Zoom Video Comms
Hence, positive alterations in estimates signify analyst optimism regarding the company’s business and profitability. In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.89 per share and a revenue of $4.6 billion, indicating changes of -6.14% and +1.64%, respectively, from the former year. Typically at the time these companies hit the market they’re still burning significant amounts of cash.
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Since then, ZM shares have decreased by 11.5% and is now trading at $63.64. The video-conferencing company’s shares have seen a decrease of 7.14% over the last month, not keeping up with the Computer and Technology sector’s gain of 2.34% and the S&P 500’s gain of 2.16%. Following the Covid-19 pandemic that impacted many workers’ lives throughout the world, Zoom’s stock reached a high point of approximately £570 in September 2020. Since this point, Zoom’s share price dropped slightly and is currently on a downtrend, trading for approximately £330 as of March 2021. This is still a much higher price than it was trading at the same point last year.
Zoom puts limits on the number of participants in a group call and the length of meetings. Zoom software gets high ratings for ease of use and simplicity following earlier video services that provided jerky images and out-of-sync audio. At its opening price, Zoom is valued at about 50 times its enterprise value, which is by far the highest multiple for U.S. software companies. Zscaler, a security software company, has an enterprise value to sales ratio of 30, according to FactSet. Demand for collaboration tools, such as Zoom has hit a new high following the coronavirus pandemic.