Zoom Stock Extends Fall Amid Fears Growth Could Be Worse Than Advertised | Barron’s
Zoom (ZM) stock forecast: Bargain opportunity or slippery slope?.
The Street is unclear on how to value Zoom as its growth slows with people returning to offices and schools, despite the lingering pandemic. So the only course of action right now it seems — sell Zoom’s stock ZM and wait for more stable waters.
Radke called the earnings report disappointing. The steep sell-off pushed shares of Zoom into the red for the past year, down about 2. Added Steckelberg on the growth slowdown, “When we look out through what we have seen is a slowdown in the online segment of the business, which again, even though the pandemic seems to be far from over, we are happy that people are feeling more comfortable out traveling.
And that’s really where we’re seeing the slowdown. And if you back all the way up to when we gave guidance at the beginning of the year, we had expected that towards the end of the year, but it’s just happened a little bit more quickly than we expected. And we, of course, feel good that people are out moving around the world. But It’s certainly creating some headwinds, as we’ve said, in the online segment of our business. Analysts are taking a mostly guarded view on Zoom in the near-term, even though many acknowledge the company will benefit from the long-term shift to hybrid work.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Read the latest financial and business news from Yahoo Finance.
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A decent dividend plus a bargain price adds up to an incredible opportunity for investors to consider. As the world faces war, an ongoing public health crisis, and social injustice, corporate executives have found themselves facing questions from their own employees about whether or not they plan to take a stand.
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Why zoom share price drop – none: –
Zoom Phone, which is the company’s new unified communications app , is helping drive this spending. Management reported in Q3 that Zoom Phone saw triple-digit percentage revenue growth year over year. A growing company like Zoom is often unprofitable, but Zoom has strong financials already.
This shows that Zoom’s profitability is accelerating as revenue is now outrunning the company’s costs. The stock market can be irrational and stock traders are prone to overreact to things.
Zoom’s stock was definitely overpriced at its peak, but the momentum has swung so far the other way that the stock is now arguably a bargain. The stock price has now fallen to pre-COVID valuation levels, despite the business’s continued growth.
Its price-to-earnings ratio of 34 is less than that of a consumer goods company like Nike , despite growing EPS at a triple-digit percentage rate.
It’s becoming harder to ignore Zoom based on the current valuation and substantial numbers it’s put up. If there is a worry for investors, it’s probably competition with Microsoft. Microsoft is much larger than Zoom, making it a formidable competitor with deep pockets.
Zoom, of course, competes with Microsoft Teams , which is a crucial cog in Microsoft’s grip on the enterprise market. Investors will want to monitor Zoom’s revenue growth and management’s comments on customer account growth to ensure that Zoom competes well.
I think that there’s room for more than one winner in such a large market, but if Zoom starts losing so much business that its growth begins declining, investors might reconsider their stance on the stock.
As the world faces war, an ongoing public health crisis, and social injustice, corporate executives have found themselves facing questions from their own employees about whether or not they plan to take a stand.
From buying groceries to gasoline to automobiles, inflation has hammered Americans’ purchasing power. In fact, the most well-known metric of inflation has soared to a four-decade high. B owns, they probably think of value-focused investing.
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It has a robust training course known as the Zoom Certified Integrator Program. Integrators gain expertise in the planning, design, and deployment of Zoom Rooms in organizations of every size, then they ensure smooth, transparent implementation of the software for Zoom clients. By nearly every measure, Zoom stock is a buy. Zoom was already making waves in the world of video conferencing when the pandemic hit.
COVID simply condensed the growth timeline that most analysts believe the company would have realized anyway. While it may not see the same triple-digit growth that occurred in over the next year or two, it is clear that Zoom has a strong foundation from which to continue its expansion.
That makes Zoom stock a Buy. Zoom has all of the hallmarks of a stock market winner, but experienced investors know there are no guarantees. The primary risks of buying Zoom are those that face every tech company — in particular, the many ways cybercriminals breach software to cause disruption, steal data, and otherwise run amok.