Zoom Stock Price Today NASDAQ: ZM Quote, Market Cap, Chart

Remote learning and needs in telemedicine also boosted demand for Zoom Video’s cloud-based services. Zoom Video Communications’ stock was trading at $71.91 at the start of the year. Since then, ZM shares have decreased by 6.5% and is now trading at $67.26. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors.

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. The company said it expects revenue of roughly $4.6 billion vs. estimates of $4.637 billion. Zoom Phone, a cloud-calling product rolled out in 2019, lets customers set up group internet phone calls without video.

The Zoom Phone replaces traditional business PBX phone systems. Sales growth slowed for the ninth-straight quarter as the company adjusts to slower product demand in the post-coronavirus emergency era. Analysts have debated when decelerating sales will hit a bottom. Also, Zoom morphed into a social phenomenon as making video calls became routine for consumers to keep in touch with family and friends.

Zoom Video Communications, Inc.

With growth expected to hit the breaks in the years ahead, the company will likely become less attractive to investors who bought into Zoom’s growth story. On the earnings front, Wall Street analysts are forecasting an average annualized growth of 28% over the next five years up to an earnings per share of $6.21 per share in fiscal year 2026. This is more favorable than Zoom’s expected top-line scenario, but many investors still might be hesitant to pay a lofty valuation for the company when taking into account the deceleration in growth. I believe Zoom still has room to grow since it clearly disrupted a fragmented market filled with mature and complacent players. Investors who expect the remote work trend to continue after the pandemic ends should accumulate some shares of Zoom after its post-earnings drop. However, the stock is still pricey and will remain volatile — so it isn’t an ideal investment for queasy investors.

Continuing the two-year comparisons, that number is up from Q3 2020, when international revenue was only 20% of total revenue. If Zoom can continue to grow internationally, it opens up plenty of new revenue opportunities. Looking back at the last two years, there https://www.tradebot.online/ may be no stock more representative of the pandemic’s impact on the stock market than Zoom Video Communications (ZM 0.09%). After growing parabolically in 2020, the stock has come crashing back to earth and is down 45% year to date at the time of this writing.

The Nasdaq composite shot up 43% amid buzz over generative artificial intelligence technology. Zoom Video Communications’ stock is owned by many different institutional and retail investors. 450 employees have rated Zoom Video Communications Chief Executive Officer Eric S. Yuan on Glassdoor.com. Eric S. Yuan has an approval rating of 97% among the company’s employees.

Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation multiples. With revenue and earnings growth expected to pull back in the years ahead, I wouldn’t be surprised to see growth-oriented investors exit their positions in Zoom stock. The slowdown in growth, combined with ongoing macroeconomic headwinds and geopolitical concerns, will put additional downward pressure on Zoom’s valuation for the foreseeable future. As a long-term investor, I don’t ignore past performance, but I’m generally more interested in where the company is heading. Zoom has provided investors with spectacular growth and returns in the past couple of years; however, I don’t see that continuing into the future. The pullback in pandemic-driven demand, in addition to increased competition from massive tech companies like Microsoft and Alphabet, will challenge Zoom’s business moving from here on out.

Is it time to buy Zoom?

In July 2021, Zoom Video and Five9 (FIVN), which automates call center services, announced a deal to merge. 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 one metric to monitor. Meanwhile, recently told its employees to report to its offices on a more regular basis. Amid Covid-19 emergency, demand for Zoom videoconferencing software surged as businesses told employees to work from home.

1. At the end of fiscal 2021, Zoom predicted its revenue would rise 42%-43% in fiscal 2022, compared to its latest guidance for 51% growth.
2. Zoom’s revenue rose 54% year over year to $1.02 billion during the second quarter and beat estimates by nearly $30 million.
3. Its rise to prominence and the resulting performance were tied to a massive need for video communications at the height of lockdowns.
4. Rivals also include bundled productivity solution providers with video functionality such as Alphabet Inc.’s (GOOGL) Google G Suite and Microsoft Inc.’s (MSFT) Microsoft Teams.
5. As the coronavirus crisis eases, retaining small businesses as well as corporate accounts will be one key to Zoom’s success.

Zoom shares have lost over 60% of their value in the past six months as part of a broader tech sell-off in response to rising interest rates and inflation. Revenue and earnings growth remain strong — analysts are forecasting revenue and earnings per share to grow by 54% and 46% year over year up to $4.1 billion and $4.87 per share in fiscal year 2022, respectively. Zoom has almost no debt, boasting a debt-to-equity ratio of 2% and a strong cash position of $1.3 billion. The company also grew free cash flow by over 1,100% in fiscal year 2021 up to $1.4 billion.

ZM Stock: Microsoft Competition

Anthropic’s AI model will be integrated into Zoom’s Contact Center platform. Prior to founding Zoom, Yuan was corporate vice president of engineering at Cisco, and was a founding engineer and vice president of engineering for web and videoconferencing platform Webex. As of Aug. 23, 2021, Zoom had 240,744,533 outstanding shares of Class A common stock and 56,383,369 outstanding shares of Class B common stock.

The significant climb in free cash flow was a result of superb revenue growth stemming from pandemic-driven demand. Zoom is still generating healthy growth on top of its triple-digit percentage revenue growth last year, but the market’s reaction indicates investors are still worried about its post-pandemic growth. Zoom’s stock was also trading at 73 times forward earnings and 26 times this year’s sales prior to its earnings report, and those high valuations indicated it needed to hit a grand slam — not just a home run — to rally higher. Zoom Video Communications’ (ZM -0.07%) stock price dropped to its lowest levels in over three months after the company released its second-quarter earnings report on Aug. 30.

The U.S. government has been increasing its scrutiny of Zoom on several fronts. In 2020, the United States charged a China-based Zoom executive with conspiring to disrupt videoconference commemorations of the 1989 Tiananmen Square democracy protests. Zoom is also the focus of several ongoing federal investigations related to its dealings with Beijing, according to the Journal.

This is especially stark when compared to the S&P 500, which is up 27% on the year. Zoom stock analysts had projected earnings of $1.15 a share on sales of $1.13 billion. Zoom earnings for the quarter ending Jan. 31 were 1.42 per share on an adjusted basis, up 16% from a year earlier. The Zoom IPO in April 2019 raised $752 million, with shares priced at 36. Zoom Video aims to be a player in the contact center market with its own products and services.

Upgrade to MarketBeat All Access to add more stocks to your watchlist. The company is scheduled to release its next quarterly earnings announcement on Monday, May 27th 2024. Sign-up to receive the latest news and ratings for Zoom Video Communications and its competitors with MarketBeat’s FREE daily newsletter.

Double-digit revenue growth for the next five years surely isn’t bad, but it doesn’t compare to the company’s 160% compound annual growth rate over the past three years. 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 Video has built up alliances with the likes of Salesforce.com (CRM), Atlassian (TEAM) and Box (BOX). Salesforce.com invested in Zoom stock prior to its initial public offering and reaped big gains. One key to Zoom’s success has been a “freemium” business model. Top website in the world when it comes to all things investing. Zoom’s latest fiscal year (FY) was FY 2021, which ended Jan. 31, 2021. For that period, the company reported net income of $672.3 million on revenue of $2.7 billion.