There are daily stock updates, markdowns, and new hedges from analysts. But there are some doubts in these Wall Street analyzes. Today, we pick one of Wall Street’s high-profile stocks and figure out if it’s a worthwhile long-term investment. Living up to its name, Zoom Video Communications (NASDAQ: ZM) made its way into the stock market, rising 72% and closing at $ 62 a share in its April IPO. Today, the company is trading close to $ 80, which makes for a more promising outlook for investors with signs of going much higher in a year. But is Zoom Stock a substantial long-term investment? Here are some vital tips for your consideration as an investor.
Start of Zoom coverage
With only eight years in the market, Zoom began reporting its income a couple of years ago. Surprisingly, the video conferencing service provider is already skyrocketing. Its sales more than doubled between 2016 and 2017 and did the same in 2018. While there has been a minimal slowdown since then, Zoom’s 95.7% year-on-year profit growth in the second quarter 2020 financial year was quite a bit. remarkable.
Zoom’s earnings are also increasing. For the first time in 2018, it announced its full-year GAAP earnings of approximately $ 7.6 million, and this represents a GAAP gain of up to $ 12.9 million in the last twelve months. And this equates to approximately $ 0.08 per share on an adjusted basis, 4 times its proforma profit for the second fiscal quarter of 2019. In addition, Zoom has even bigger plans for its future.
Give new orientation
Zoom’s management has resorted to offering new guidance for the year based on its recently released second quarter earnings. Its sales soared 78% to $ 590 million and its adjusted earnings quadrupled to $ 0.8- $ 0.19 per market share. In reviewing these results, Baird strongly believes that the company has a “massive” addressable market of people who could also take advantage of the benefits of reliable video conferencing. Baird is also impressed with the way Zoom has quickly captured the market in a short period of time.
In addition to the Zoom video, the Zoom Phone service launched in January 2019 could become a powerful catalyst for growth. It can usher in a considerable frontier to replace legacy phone systems among consumers. The launch of the cloud-based phone service had an impressive performance, according to CFO Kelly Steckelberg in the second-quarter conference call. The service has gained traction in all business segments, with nearly 50% of Zoom Phone’s service having an annual revenue in excess of 100K.
Zoom Stock after the COVID-19 outbreak
As coronavirus fears continue to negatively affect most stocks today, Zoom’s stock price is surprisingly soaring even higher. Its stock price rose to a bewildering 11%, while the S & P500 type fell. As a video conferencing provider, Zoom’s stock price is on the rise as it helps people work from home, especially with the possibility of closings being announced. However, with the fourth quarter results, is Zoom’s stock a long-term buy?
Zoom’s stock price is expected to take full advantage of the assumption that more white-collar professionals will be working from home in case the corona outbreak becomes severe. Telecommunications will become more popular as people stay and work from home, so Zoom shares will be winners even though they are highly overvalued, according to Rick Munarriz of Motley Fool.
While the Corona outbreak is causing companies to consider teleconferencing solutions, other factors are also causing this. Most administrative professionals find the convenience of working from the comfort of their homes. Whether it’s Microsoft Teams, Google Hangouts, or Zoom, the business meeting now doesn’t necessarily have to take place in a physical office. As more organizations embrace flexible working, Zoom is preparing to benefit more. The company’s third-quarter figures saw an increase in its revenues thanks to the attraction of new clients and the expansion of its services to the existing client base. After the Coronavirus becomes a thing of the past, thankfully, there will continue to be a need for teleconferencing technologies.