Zoom stock price forecast 2021
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Zoom stock price forecast 2021
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.
Looking ahead, there is little doubt that Zoom’s revenue and earnings will be higher in calendar year or fiscal year , but it is the future pace of growth that matters. The forward-looking numbers for the full-year are realistic, taking into account the strong 1Q FY results and the expected slow-down in subsequent quarters as WFH Work-From-Home tailwinds ease.
Zoom’s slower pace of growth in the next two years is not surprising. The churn for ZM’s client segment with fewer than 10 staff will likely increase going forward and become a drag on the company’s overall sales growth. At the same time, it is reasonable to assume that Zoom still derives most of its revenue from its core Zoom Meetings product, and it will take some time for Zoom Phone to be a significant contributor to the company’s top line.
In other words, Zoom’s revenue and net profit will go up in calendar year , but ZM’s stock price might not go up for the rest of the year as investors gradually price in lower growth expectations for the stock. Despite this, Zoom’s forward Enterprise Value-to-Revenue valuations are the second highest in the peer group. As such, I don’t view Zoom’s valuations as sufficiently attractive to justify a Buy rating. Sign up here to get started today!
Those who believe that the pendulum will move in one direction forever or reside at an extreme forever eventually will lose huge sums. Those who understand the pendulum’s behavior can benefit enormously. I wrote this article myself, and it expresses my own opinions.
The company’s shares skyrocketed accordingly, nearly tripling in value between April and October. But despite these impressive gains, investor confidence has cooled-off somewhat recently.
Increasing competition in the sector, coupled with lockdown restrictions being eased, pared back the Zoom share price forecast among analysts. Can Zoom prove to be more than a Covid stock? We dive into the key quarterly figures and look into the Zoom stock forecast. Investors responded cautiously to this decelerating growth rate.
Zoom’s shares went south on 22 November, opening lower still the following day. At time of writing, ZM is Operating cash flow was marginally lower compared to the second quarter, driven by increased marketing and research and development expenses. The quarterly results left the company feeling positive about its immediate future.
Come global lockdown, the chart proceeded to show continual and dramatic bull patterns, including a skyrocketing Although bears cut this figure down somewhat, Zoom stock continued to climb. Despite more pronounced bearish dips in the following 12 months, moving averages still continued to rise, propelled by rising support and resistance lines clearly evident on the chart.
As the Delta variant of Covid began to sweep across the globe, entrenching the popularity of working from home, so too did the popularity of Zoom, regaining some of its value. But the day moving average steadily declined throughout the second half of , despite a subtle bump in early November, indicating a bearish advantage.
The shooting star pattern on 17 November foreshadowed a bearish advantage, dragging the price down 4. You voted bearish. You voted bullish. This could suggest the continuation of a downtrend, but as always, this analysis is speculative and any possible projections are contingent on numerous factors.
Be sure to check out our latest ZM stock price to stay informed. Firstly, the possibility of an overvalued Zoom stock forecast estimation should be considered.
As we can observe when tracing the recent ZM stock price history, market capitalisation is reactive to constantly changing global conditions. Will Zoom stocks once again climb should a fresh wave of lockdowns be imposed on major economies, or will it keep plummeting as people get back to the offices? That is the big question. Competition rapidly increased in this sector in recent years, yet Zoom remains by far the dominant market player.
Video conferencing is largely its main driver of revenue, whereas competition in this space is mainly driven by the conglomerates Microsoft Teams and Skype , Alphabet Google Meet and Cisco Webex. With a business portfolio heavily contingent on the precarious video conferencing segment, it is little wonder that Zoom is seeking to diversify its revenue streams. It has not been smooth sailing. Elsewhere, Zoom recently announced plans to acquire Kites, a German company focused on real-time translation services.
This could prove to be an attractive driver of user engagement. As such, the majority of polled investment analysts have a buy sentiment, being 14 against 13 suggesting to hold. One analyst recommends a sell strategy.
Collating the Zoom stock forecast among 27 investment advisors, 15 recommend a buy or strong buy strategy while 11 advisors suggest holding for now. One advisor recommends selling ZM stock. Zoom stock continues to downtrend as investors are wary of slowing yearly growth. That said, many analysts have a month target above current levels.