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Zoom Video Communications ZM Ascends But Remains Behind Market: Some Facts to Note

When the pandemic hit, video communication became essential, and that’s when Zoom’s stock reached its highest point in October 2020. Throughout this year, the stock has remained relatively flat, only experiencing a small increase of 1.12% on the day being discussed. 450 employees have rated Zoom Video Communications Chief Executive Officer Eric S. Yuan on Eric S. Yuan has an approval rating of 97% among the company’s employees. This puts Eric S. Yuan in the top 30% of approval ratings compared to other CEOs of publicly-traded companies. For the current quarter, Zoom predicted adjusted earnings of $1.14 a share on sales of $1.13 billion.

  1. The Enterprise plan also costs $20/host/month, but requires a minimum of 100 hosts.
  2. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.
  3. He pointed to the company’s recent addition of AR features, as an example.
  4. Zoom Video recently backed off from a change in its terms of service for platform users that would have enabled it to gather data to train AI models.
  5. The last step is to then divide the equity value by the number of shares outstanding.
  6. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.18% per year.

The company is headquartered in San Jose, Calif., and has additional offices in more than 15 locations in the United States, Europe, Asia, and Australia.

Demand for collaboration tools, such as Zoom has hit a new high following the coronavirus pandemic. Most company’s employees are working from home and there is limited contact between businesses dealing with one another. A combination of these factors and the likelihood of social distancing lasting throughout 2021 could boost Zoom’s revenue accordingly. With around half of Fortune 500 companies reportedly using Zoom in 2019, it’s no surprise that Zoom’s stock price has risen drastically since the outbreak of Covid-19. The virus has caused many to work remotely, creating a larger demand for conferencing tools that enable workers and teams to keep in touch and continue collaborating.

Don’t let Zoom’s past success dictate your decision to invest in the company today.

Each of these adds substantial additional features, like the ability to conference more than 100 people at a time and extending the meeting duration past 40 minutes (in fact, a meeting can be up to 24 hours long). Even at the free account level, you can record and save your meetings, share your desktop with the meeting attendees, and use chat tools during the meeting. Together Mode in Microsoft Teams puts video meeting participants in a virtual setting designed to make meetngs more engaging. As a video-only platform, Zoom’s biggest competitors are LogMeIn’s GoToMeeting and Cisco Webex, both long-standing staples of the videoconferencing market. The videoconferencing landscape is not short of vendors, with companies such as Cisco, Google, Microsoft and Facebook all offering enterprise users a video platform.

There is one caveat worth mentioning — Zoom’s growth in the coming years is expected to let up significantly from current levels. As the pandemic unwinds and Zoom becomes a more mature company, it’s inevitable that sales growth will come down from its all-time highs. Analysts are forecasting Zoom’s revenue to come in at $7.7 billion in fiscal year 2026, indicating an average annualized growth of 13% from 2022 estimates. 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. Launched in 2017, Teams has now largely replaced Skype for Business as the communications hub for the Office 365 and Microsoft 365 suites.

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The zoom out icon only appears once a zoom in operation has been performed. Shares of the video-conferencing company have depreciated by 10.73% over the course of the past month, underperforming the Computer and Technology sector’s gain of 3.1% and the S&P 500’s gain of 3.56%. Zoom can be accessed and traded on with our selection of trading accounts.

Many analysts predict that Zoom could grow its annual revenue to around the £1bn mark by 2021, a significant increase from the £662m in 2019. Besides the spike of users from coronavirus, many companies are becoming more remote. This ‘remote working revolution’ will require effective video conferencing software, such as Zoom to contribute to the revolution. Zoom is a cloud-based conferencing software that can be used via your browser, desktop or mobile application. Zoom enables users to virtually interact with contacts when a physical meeting is not possible, such as if you work remotely. Zoom is more than a video chat software, as it allows users to record meetings, share one another’s screens and create annotations.

The Internet – Software was holding an average PEG ratio of 1.87 at yesterday’s closing price. Mixed analyst reports and volatile financial markets mean it is unknown how Zoom’s share price will fluctuate in the future. However, it managed to increase its stock price by 200% in a period when the S&P 500 dropped by 17%, and has outperformed several high-profile tech stocks like Slack and Uber. Investors will be eagerly watching for the performance of Zoom Video Communications in its upcoming earnings disclosure. The company’s earnings report is set to be unveiled on February 26, 2024.

How to use Zoom

In some ways, the Zoom videoconferencing app seemed to come from nowhere this year — even though it’s been around since 2013 and has long been highly regarded for its ease of use. If you’re after a new webcam for Zoom video conferencing, or indeed any other kind of video conferencing, these are our top recommendations right now. Quoted prices do not cover additional add-ons – such as webinar facilities, large meetings (up to 1000 participants) and additional cloud recording storage – which will bump up the price. It’s used primarily by businesses to host meetings with remote colleagues and clients, but Zoom is an equally useful tool for keeping in touch with friends and family. The nice thing about this method is it’s the most precise method for zooming in.

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The predicted earnings per share and revenue growth give us an insight into the market’s expectations for the company. To stay competitive as more people go back to their offices, Zoom has been developing new tools powered by artificial intelligence. It is also planning to enter into the Contact Center and Docs markets to take on Microsoft and Google. These strategic moves will be closely watched to see if Zoom can maintain its success and increase its market share.

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In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period.

With the coronavirus emergency long over, the clock is ticking on Zoom Video Communications (ZM). A rebound in revenue growth for Zoom stock depends on its success in the corporate market. And the outlook for ZM stock is tied to whether the company morphs into a broader business communications platform. Zoom is a member of the information technology sector and operates within the software industry. They include legacy web-based meeting service providers such as Cisco Systems Inc.’s (CSCO) WebEx and LogMeIn Inc.’s GoToMeeting.

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Zoom appears poised to continue its growth, because even after the COVID-19 pandemic subsides, large numbers of workers are likely to continue to work remotely. “Zoom was also quick to take actions on changing the defaults that helped address meeting privacy concerns, as well as setting a 90-day plan for deeper actions, and communicating it publicly.” Although Zoom prides amana capital withdrawal itself on offering a high-quality meeting platform, the company treads a fine line between adding new features and not overwhelming it with the whims of every end user. Despite some missteps, the company appears poised to continue to grow and evolve, making it an important tool for companies looking to ride out the pandemic with workers distributed far and wide.

“Long term, despite the fierce competition, their vision is to reinvent how we use videoconferencing both as enterprises and personally,” Kurtzman said. Zoom offers a range of different plans, which vary in terms of costs and the number of participants who can take part on a video call. One of the first issues raised involved Zoom’s promise to offer “end-to-end encryption” of video chats.

The Enterprise plan allows for up to 500 users per call, or 1,000 with an upgrade to Enterprise Plus. Notably, some of those security issues arose because new users did not understand how to configure the Zoom app to protect meetings. Analysts and security experts argued that security settings should have been enabled by default, especially for a platform that made its name on ease of use. Zoom has been working in recent months to bolster third-party integrations. Founded by former Webex executive Eric Yuan in 2011 and officially launched in 2013, Zoom’s aim is to make videoconferencing easy and accessible.

Also, Zoom Video has forged new deals in the enterprise market, such as one with software maker ServiceNow (NOW). One key to Zoom’s success has been a “freemium” business model. Zoom Video aims to be a player in the contact center market with its own products and services. Zoom Video in early March said company President Greg Tomb, a former cloud computing executive at Alphabet’s (GOOGL) Google, will leave.