Zoom Video Communications Shares Drop on Concerns of Slowed Growth in US and Europe
January 27, 2023
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Zoom Video Communications ($NASDAQ:ZM), Inc. is a publicly traded communications technology company based in San Jose, California. The company’s products are used by millions of people around the world to stay connected and collaborate with colleagues, friends and family. On Monday, Zoom Video Communications’ shares dropped after MKM Partners analyst Catharine Trebnick reduced her rating on the communications platform to “neutral” from “buy” and decreased her price target on its stock to $75 from $100. Trebnick suggested that due to Europe’s economic strain and a slowing U.S. growth, there is limited potential for gains in Zoom’s Meetings offerings. Trebnick believes that Zoom’s shift from offering free services to charging for them may be hindered by the current strain on Europe’s economy, as well as a slowing U.S. growth. She also believes that the company will have difficulty maintaining its current levels of growth in the face of increased competition from other providers.
Additionally, she believes that Zoom’s revenue growth is likely to slow in the near future as more people move away from paying for online meetings. Despite the lowered expectations, Zoom Video Communications still remains one of the most popular video communication platforms. The company’s products are used by millions of people around the world, including businesses, schools, healthcare professionals and others. The company also continues to expand its offerings to include new features and capabilities, such as its recently launched Zoom Rooms for large-scale virtual events and Zoom Phone for business calling. Overall, despite the lowered expectations from MKM Partners analyst Catharine Trebnick, Zoom Video Communications still remains a popular and powerful tool for video communication. With its continued expansion of features and capabilities, Zoom will likely remain a leader in the industry for some time to come.
Share Price
Shares of Zoom Video Communications dropped on Monday amid reports of slowed growth in the US and Europe. Despite so far mostly positive news coverage, the market reacted negatively to the announcement. Zoom Video Communications opened at $69.0 and closed at $71.0, up by 2.1% from its previous closing price of 69.5. Analysts are concerned about the company’s ability to sustain its rapid growth rate in the US and Europe since it is already well established in Asia Pacific. The company has also faced criticism over its privacy and security practices, which could further impact its growth in the US and Europe. Zoom’s shares have been on a tear since the pandemic began, with its stock price more than quadrupling this year.
However, investors are now worried that the company’s rapid growth may not be sustainable. As such, they are retreating from the stock, resulting in a decrease in share price. It remains to be seen how Zoom will respond to these concerns and whether it will be able to sustain its growth in the US and Europe. While the market reacted negatively to the news, it is possible that the company can address the issues and continue to grow its presence in those regions. For now, investors will be watching closely to see how Zoom responds to these concerns and what effect it will have on its stock price. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for ZM. More…
| Total Revenues | Net Income | Net Margin |
| 4.35k | 698.23 | 18.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for ZM. More…
| Operations | Investing | Financing |
| 1.29k | -552.61 | -935.5 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for ZM. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.84k | 2.08k | 20.13 |
Key Ratios Snapshot
Some of the financial key ratios for ZM are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 100.4% | 334.7% | 10.9% |
| FCF Margin | ROE | ROA |
| 27.1% | 5.0% | 3.8% |
VI Analysis
Investors interested in long-term potential should consider investing in companies with strong fundamentals, such as ZOOM VIDEO COMMUNICATIONS. The VI Star Chart of the company reveals that the company is strong in asset, growth, profitability, and weak in dividend. The company has a high health score of 10/10, indicating that it is capable of safely riding out any crisis without the risk of bankruptcy. It is classified as a ‘gorilla’, a type of company that has achieved stable and high revenue or earning growth due to its strong competitive advantage. Investors looking for a safe and long-term investment option should consider ZOOM VIDEO COMMUNICATIONS. They can take advantage of the company’s strong fundamentals and the assurance that it can weather any crisis. Furthermore, investing in a ‘gorilla’ company such as ZOOM VIDEO COMMUNICATIONS can provide investors with higher returns due to its strong competitive advantage. It also provides investors with a greater degree of stability, as it is not as prone to market volatility compared to other companies. In short, ZOOM VIDEO COMMUNICATIONS is an attractive option for long-term investors looking for a safe and steady return on their investments. More…
VI Peers
In recent years, the video conferencing market has been growing rapidly with the advent of new technologies. Among the various players in this market, Zoom Video Communications Inc has emerged as a clear leader, with a market share of around 60%.
However, the company faces stiff competition from a number of other players, including Blackbird PLC, ironSource Ltd, and SentinelOne Inc.
– Blackbird PLC ($LSE:BIRD)
Blackbird PLC is a 54.22M market cap company with a ROE of -8.0%. The company is engaged in the business of providing technology solutions and services. It offers a range of products and services, including software development, web design, e-commerce, and online marketing. The company has a strong focus on delivering quality products and services to its clients. It has a team of experienced professionals who are committed to providing the best possible solutions to their clients’ needs.
– ironSource Ltd ($NYSE:IS)
IronSource Ltd is a provider of software development tools. The company has a market cap of 3.26B as of 2022 and a return on equity of 4.06%. IronSource Ltd provides tools to enable developers to create, manage, and optimize their applications. The company offers a suite of products that help developers to design, develop, test, and deploy their applications.
– SentinelOne Inc ($NYSE:S)
SentinelOne Inc is a publicly traded cybersecurity company headquartered in Mountain View, California. The company provides endpoint security, network security, and cloud security solutions. As of 2022, the company has a market capitalization of 6.58 billion and a return on equity of -12.5%. The company’s products are used by government agencies and Fortune 500 companies around the world.
Summary
Zoom Video Communications is a video-conferencing company that has seen tremendous growth in the past year. Despite this, many investors remain bullish on Zoom’s long-term prospects. Analysts point to the company’s strong position in the market, its ability to innovate, and its wide range of services as key factors for its continued success. With the current market uncertainty, investors should take a close look at Zoom and its potential before making any decisions.
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