– Zoom shares drop as big client additions fall short, growth concerns mount | Business Standard News

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Why the Stock Is Falling. Zoom Video Communications stock fell in premarket trading Tuesday after the company reported more than $1 billion in quarterly revenue Monday, topping analyst expectations. Dec 01,  · Zoom shares fell nearly 14% on Tuesday morning, a day after the company beat earnings expectations but signaled its tremendous growth rate seems to be slowing. Sep 02,  · What happened. Shares of Zoom Video (ZM %) have dropped today, down by 7% as of p.m. EDT, as investors took profits off the table following a massive surge this week. The.
 
 

 

Will Zoom Stock Keep Falling in ? | The Motley Fool.

 

Relative strength accompanied their recent movements,. Zoom skyrocketed in popularity during the early stages of the pandemic as more people worked remotely from home. What went wrong for Zoom in Q1? Yahoo Finance. Sign in. Sign in to view your mail. Finance Home. Zoom Video Communications, Inc. After Zoom reported earnings after market close Nov. Castanon thinks that the momentum Zoom experienced during the pandemic lit a fire under its larger, deeper-pocketed competitors — including Microsoft Corp.

The market is now crowded with very well-established alternatives, and Zoom is feeling the impact. Zoom reported about , customers with more than 10 employees at the end of the quarter ended Oct.

By comparison, the October quarter saw Moving beyond videoconferencing. Although Zoom’s claim to fame was its videoconferencing platform, the company is looking to expand its presence into other businesses as it seeks to reaccelerate growth.

One increasingly lucrative business segment that Zoom is eyeing is contact center software, which uses artificial intelligence to help companies interact with customers. Zoom now plans to launch its own solution in the space — Zoom Video Engagement Center — in early A spokesperson for the company declined to comment on the new service. Keith Snyder, an analyst at independent investment research firm CFRA, said this is an extremely attractive market for Zoom, as it synergizes well with the company’s existing range of products, but entry may not be a cakewalk.

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. Cost basis and return based on previous market day close.

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