Zoom became a leader in video chat and teleconferencing because it has a superior quality with less lag time than competitors such as Google Hangouts, TeamViewer, and Microsoft Teams. While Zoom offers a robust free service without ads, it also has a paid subscription service. Zoom also rents hardware to help those looking for the best video conferencing solutions.
From there, users can get a phone plan for $10 per month per user. The video conferencing Pro plan starts at $14.99 per license forex quotes per month. The Business plan is $19.99 per license per month that allows up to 99 licenses and 300 participants.
Also, Zoom Video has forged new deals in the enterprise market, such as one with software maker ServiceNow (NOW). A “Zoom Meeting” refers to a videoconferencing session hosted on its cloud infrastructure. Paid Zoom business plans cost $15 or $20 per employee and require minimums of 10 or 50 seats. In the business market, Zoom rivals include RingCentral (RNG), Cisco Systems (CSCO), Google and others. Growth in annual recurring revenue for business customers with contracts topping $100,000 is one metric to monitor.
The window of opportunity for Zoom to use its inflated stock to diversify via acquisitions appears to be closed. The company is already seeing some of its pandemic-era growth start to unwind. Where the post-pandemic baseline for Zoom ends up settling is anyone’s guess.
Any recent changes to analyst estimates for Zoom Video Communications should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook. Heading into today, shares of the video-conferencing company had lost 5.8% over the past month, lagging the Computer and Technology sector’s gain of 4.99% and the S&P 500’s gain of 2.5% in that time. After filing to go public on March 22, Zoom estimated two weeks later that it would price shares in the range of $28 to $32. Zoom increased the range to between $32 and $35 this week, and on Wednesday it priced above the top of that range, valuing the company at $9.2 billion.
- A higher P/E indicates that investors expect the company to perform better in the future, and the stock is probably overvalued, but not necessarily.
- On the back of hyperbolic revenue growth during the COVID-19 pandemic, Zoom turned into a pandemic darling on Wall Street, with ZM stock rising from ~$60 to ~$594 (nearly 10x) in a matter of months.
- By now, everyone’s realized that Zoom was one of the few winners of the COVID-19 pandemic, having achieved colossal financial success and become a go-to videoconferencing tool for many organizations.
- The consensus among 27 analysts reported by the Wall Street Journal is that Zoom is “overweight,” meaning analysts expect its performance to improve.
- Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.
Also, Zoom morphed into a social phenomenon as making video calls became routine for consumers to keep in touch with family and friends. Remote learning and needs in telemedicine also boosted demand for Zoom Video’s cloud-based services. Zoom remains popular in workplaces, though its stock price has dropped considerably since the early days of the pandemic. Read on to find out how to evaluate Zoom stock and decide whether to buy.
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She revels in the world of data and derives insights that drive decision-making and business strategies. This penchant for numbers enhances her ability to craft data-driven articles, guiding readers through complex topics with clarity and reliability. That, coupled with the successful IPO and constant investment in innovations, gives us confidence that Zoom is here to stay and will perhaps even become a full-on end-to-end enterprise collaboration SaaS.
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At its annual Zoomtopia user conference in early October, the company said it will not charge customers for use of its AI Companion. Its capabilities include meeting/chat summaries and smart recordings. Zoom Video reported third quarter earnings that topped estimates but offered mixed guidance for the current period.
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And yet, that’s exactly what happened for Zoom in 2020 – nine years after it was launched. At the end of fiscal 2021, Zoom predicted its revenue would rise 42%-43% in fiscal 2022, compared to its latest guidance for 51% growth. Therefore, Zoom clearly prefers to temper Wall Street’s expectations instead of raising the bar too high and setting itself up for a big earnings miss. Zoom expects its revenue to rise 31% year over year in the third quarter, which surpasses analysts’ estimates, but for its adjusted EPS to grow just 8%-9%, which misses expectations for 10% growth. Should investors buy Zoom’s dip, or should they avoid it as more people physically return to work and school?
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. A combination of these factors and the likelihood of social distancing lasting throughout 2021 could boost Zoom’s revenue accordingly. In an effort to boost growth, Zoom tried to acquire Five9 (FIVN) in 2021, but that deal collapsed soon after. Since then, Zoom has pivoted to building a contact center platform in-house, and I think Zoom Contact Center has the potential to drive the next leg of growth at the company. During the Q2 earnings call, Zoom’s leadership shared some exciting customer wins for Zoom Contact Center, which has now surpassed 500 customers in just 6 quarters.
Market Share by Region
These numbers notwithstanding, it’s hard to estimate the exact total number of Zoom users who are individual humans. However, the number of companies with more than 10 employees that used Zoom grew from 81,900 in FY2020 to 467,100 in FY2021. In retrospect, it’s almost difficult to believe a video conferencing company rose to the top of the charts thanks to the global COVID pandemic.
Zoom Video Communications Insider Activity
As of January 2023 (FY23), its total annual revenue was $4.392 billion – a 7.13% increase from the previous fiscal year, at $4.099 billion in revenue. And the first quarter of 2023 also showed promising revenue results – the company made over $1.105 billion in Q1, showing a 3% YoY growth. In April 2020, the first pandemic peak, Zoom had 300 million daily meeting participants on average, according to its estimates. This figure signifies a 30x growth from 10 million daily meeting participants recorded in December 2019.
