Traders are bracing for some volatility after the results, with the stock expected to move more than 21% in either direction - that’s bigger than the moves seen after the past six quarterly reports were issued, according to data compiled by Bloomberg. To be sure, Zoom’s growth is slowing as schools restart in person, offices reopen and competition increases from Microsoft Corp 's (NASDAQ: MSFT) Teams software, Salesforce (NYSE: CRM) Inc.’s Slack platform and Cisco Systems Inc's (NASDAQ: CSCO) Webex. The San Jose, California-based company trades at about 25 times forward earnings, down from 225 times in September 2020. Zoom closed at $89.74 on Friday.įurthermore, the stock’s valuation is nowhere near as frothy as it once was. While that’s a far cry from its 2020 closing high of $568.34, it represents a hefty potential return for those purchasing the shares at current depressed levels. She has an overweight recommendation on Zoom.īacking up the largely bullish sentiment, analysts forecast that the shares will rise 60% to $143.30 in the next 12 months, according to data compiled by Bloomberg. “Renewals for contracts signed in the early stages of Covid will have passed for another year in the March/April timeframe, which will provide a better view into enterprise customer retention,” Marshall wrote in a note. Morgan Stanley (NYSE: MS) analyst Meta Marshall says the quarterly report should act as a catalyst to disprove the overly bearish sentiment about Zoom’s growth. “They’re just kind of stamping it with the stay-at-home Covid trade like Amazon (NASDAQ: AMZN) or Netflix and are not really looking at the bigger fundamentals.” “I think the Street is not filtering through all the tea leaves with Zoom,” said Daniel Morgan, senior portfolio manager at Synovus Trust. After a more than 12-fold rise in sales in its last three fiscal years, analysts expect a 12% increase in the first quarter.Ĭompare that with Netflix Inc (NASDAQ: NFLX)., which wasn’t able to sustain a massive pull forward in new customers during the pandemic and shocked Wall Street last month with its first decline in subscribers in over a decade.Īnalysts like Harrigan think Zoom’s product offerings can make it a post-Covid winner as more employees seek flexible work arrangements.
Credit Suisse Group AG Chief Executive Officer Thomas Gottstein said he doesn’t think banks will ever return to working full-time from the office.Īll of that bodes well for Zoom, which unlike some pandemic darlings is still showing growth in its key metrics. this month delayed a plan to require workers to come back to the office three days a week. Most major companies now offer employees the flexibility to work both from the office and from home, though even that has faced challenges due to rising Covid cases in many countries. “The fixation on Zoom as a Covid pandemic lockdown aberration is exaggerated as global tech and financial firms recognize the permanence of hybrid work,” Harrigan said in a note to clients previewing first-quarter results that are due for release after US markets close on Monday. And with the stock having cratered almost 85% from its 2020 pandemic peak, wiping out about $135 billion of market value, they see scope for a rally. That’s the message from Benchmark Co.’s Matthew Harrigan and other analysts, who say the video-conferencing company is well positioned as a hybrid work services provider after riding the stay-at-home boom.
(Bloomberg) - The selloff in Zoom Video Communications (NASDAQ: ZM) Inc.’s stock may have gone too far. © Reuters Zoom’s 85% Selloff Has Analysts Calling for a Rally
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