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- Zoom stock price prediction 2021 - none:
Those valuations would be reasonable if Zoom's growth rates were more predictable, but they're simply too hot for a company in the midst of an ongoing slowdown. Salesforce's stock trades at 66 times forward earnings and just nine times next year's sales. I own some shares of Zoom, but I don't think it's the right time to double down on this polarizing stock yet. Zoom has an attractive brand and a sticky platform, but it's unclear if it can continue generating double-digit sales growth as the pandemic ends and Microsoft aggressively expands Teams.
Instead, I'd monitor Zoom's growth over the next few quarters to see if its year-over-year growth stabilizes before buying any more shares. Cost basis and return based on previous market day close. Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of Discounted offers are only available to new members.
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Image source: Zoom. Zoom Video Communications. Motley Fool Returns Market-beating stocks from our award-winning service. Stock Advisor Returns. Join Stock Advisor. Zoom's top line is expected to grow in calendar year or fiscal year , but its stock price might not increase this year as result of lower growth expectations.
Zoom stock is not a good Buy for me now, as its rich valuations are not aligned with the company's slower pace of growth going forward. However, I am positive on Zoom Phone becoming a key growth driver for the company in time to come. Considering these factors, I continue to rate Zoom's shares as Neutral. It is relevant to note Zoom's stock price reaction post-1Q FY YE January 31, results announcement, which was released on June 1, after trading hours.
Initially, ZM's share price declined marginally by ZM's subsequent share price increase in the past two weeks is likely due to selected sell-side analyst bullishness and the launch of new product solutions relating to Zoom Phone. Last week, Zoom Video Communications was named as one of the software industry picks by RBC, considering that its products are "a critical component of the coming hybrid work norm" and that "the sharp pullback has created an attractive entry point" for the stock.
Earlier on June 9, , Zoom revealed that it has introduced the new Zoom Phone Appliances, which is "an all-in-one desk phone solution for HD video meetings, phone calls, and interactive whiteboarding. In my April initiation article for Zoom, I had noted that "increasing revenue from new products like Zoom Phone" is a key growth driver for the company.
The new Zoom Phone Appliances, which the company refers to as a "new device category" for the Zoom Phone at its recent earnings call, is expected to further boost the sales of the Zoom Phone in the near future.
Source: Zoom's June 9, Press Release. I evaluate Zoom's recent 1Q FY financial performance and its growth prospects for calendar year and fiscal year February 1, to January 31, in the subsequent section. Zoom's financial performance in the first quarter of fiscal was excellent on a YoY comparison and exceeded market expectations.
At the company's 1Q FY results briefing on June 1, , Zoom Video Communications highlighted that "revenue upside in the quarter carried through to the bottom line ", which implied that operating leverage was the key driver of ZM's significant improvement in profitability in the recent quarter. Apart from headline financial numbers, there are two key metrics to watch for Zoom.
One key metric is the revenue contribution from Zoom's clients with less than 10 staff. In other words, this client segment drove Zoom's growth in 1Q FY , but that might not be sustainable.
In my initiation article published in April , I mentioned that I "expect Zoom's churn rate for its customer cohort with less than 10 staff to be significantly higher than its customer cohort with more than 10 employees" going forward. This is aligned with the company management's comments at the recent 1Q FY earnings call, where Zoom stressed that churn for the specific customer segment with less than 10 employees could be "more volatile as economies continue to reopen" because most of them are on "monthly plans" as opposed to yearly subscriptions.
Another key metric is Zoom Phone sales. On a cumulative basis, Zoom Phone sales have increased from approximately one million seats as of end calendar year to around 1. With expectations that more people could be returning to offices in time to come as and when the pandemic is contained, the increased sales for the Zoom Phone could help to offset the reduced demand for Zoom Meetings. Also, as highlighted in the preceding section of this article, the introduction of new Zoom Phone Appliances with improved functionality catering to office needs like the interactive whiteboarding feature could help to drive the growth in Zoom Phone sales in the future.
In summary, a higher-than-expected churn rate for Zoom's customer segment with less than 10 staff is a key downside risk, while Zoom Phone sales could surprise on the upside and boost the company's top line.
Is Zoom Video Communications Stock a Buy? | The Motley Fool.Zoom Video Communications Stock Forecast up to $ - ZM Price Prediction
- Zoom stock price prediction 2021 - none:
Close Menu. Log in. Log out. Premium Services Our Analysts. Sponsored by. Sponsored Headlines. More from InvestorPlace. Subscriber Sign in Username. Sign in. Having trouble logging in? I evaluate Zoom's recent 1Q FY financial performance and its growth prospects for calendar year and fiscal year February 1, to January 31, in the subsequent section. Zoom's financial performance in the first quarter of fiscal was excellent on a YoY comparison and exceeded market expectations.
At the company's 1Q FY results briefing on June 1, , Zoom Video Communications highlighted that "revenue upside in the quarter carried through to the bottom line ", which implied that operating leverage was the key driver of ZM's significant improvement in profitability in the recent quarter. Apart from headline financial numbers, there are two key metrics to watch for Zoom. One key metric is the revenue contribution from Zoom's clients with less than 10 staff.
In other words, this client segment drove Zoom's growth in 1Q FY , but that might not be sustainable. In my initiation article published in April , I mentioned that I "expect Zoom's churn rate for its customer cohort with less than 10 staff to be significantly higher than its customer cohort with more than 10 employees" going forward. This is aligned with the company management's comments at the recent 1Q FY earnings call, where Zoom stressed that churn for the specific customer segment with less than 10 employees could be "more volatile as economies continue to reopen" because most of them are on "monthly plans" as opposed to yearly subscriptions.
Another key metric is Zoom Phone sales. On a cumulative basis, Zoom Phone sales have increased from approximately one million seats as of end calendar year to around 1. With expectations that more people could be returning to offices in time to come as and when the pandemic is contained, the increased sales for the Zoom Phone could help to offset the reduced demand for Zoom Meetings. Also, as highlighted in the preceding section of this article, the introduction of new Zoom Phone Appliances with improved functionality catering to office needs like the interactive whiteboarding feature could help to drive the growth in Zoom Phone sales in the future.
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Learn More. Zoom Video Communications ' ZM That sell-off continued after its third-quarter report on Nov. At first glance, Zoom's headline numbers looked solid. However, Zoom's growth continues to decelerate, and its guidance indicates that the slowdown will continue.
Let's take a closer look at Zoom's growth rates, outlook, and valuations to see if it's still a worthy investment.
Zoom was already generating robust growth back in fiscal , which ended in January of that year, before the pandemic hit. When the pandemic forced more people to attend classes and work remotely, its growth accelerated to breakneck levels in fiscal However, those tailwinds waned throughout fiscal as vaccination rates rose and more people physically returned to classrooms and offices:. Both of those forecasts surpassed analysts' expectations and indicated the company could still generate impressive double-digit growth on top of its triple-digit growth last year.
Those estimates will likely be raised after its latest report, but they still imply the company will face increasingly difficult year-over-year comparisons as the pandemic ends.
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