Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation multiples. With revenue and earnings growth expected to pull back in the years ahead, I wouldn’t be surprised to see growth-oriented investors exit their positions in Zoom stock. The slowdown in growth, combined with ongoing macroeconomic headwinds and geopolitical concerns, will put additional downward pressure on Zoom’s valuation for the foreseeable future. Royal Bank of Canada restated an “outperform” rating and issued a $95.00 price target on shares of Zoom Video Communications in a research report on Tuesday, May 21st.
Zoom Video Communications (ZM) Rises But Trails Market: What Investors Should Know
The bid price is the price at which you can sell the base currency — in other words, the price the dealer will “bid,” or pay, for it. The ask price is the price at which you can buy the base currency — the price at which the dealer will sell it, or “ask” for it. Active trading strategies and complex investment products don’t have a place in most portfolios. Financial advisors often strongly recommend low-cost index funds for long-term goals like saving for retirement. However, Zoom’s growth continues to decelerate, and its guidance indicates that the slowdown will continue. Let’s take a closer look at Zoom’s growth rates, outlook, and valuations to see if it’s still a worthy investment.
A dirt cheap valuation
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. Free Zoom offers video conferencing for up to 100 participants, provided the meeting runs for no longer than 40 minutes, at which point attendees are ejected from the conference. If you don’t mind the hassle of dialling back in, the host can simply start another call.
Related Stocks
For that period, the company reported net income of $672.3 million on revenue of $2.7 billion. Click the link below and we’ll send you MarketBeat’s list of ten stocks that will drive in any economic environment. While Zoom Video Communications currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better buys. Shares of the video-conferencing company witnessed a gain of 1.95% over the previous month, beating the performance of the Computer and Technology sector with its loss of 5.32% and the S&P 500’s loss of 1.16%. Overall, I’m cautiously bullish on Zoom stock under the belief that its strong points outweigh the risks.
About Zoom Video Communications Stock (NASDAQ:ZM)
Attendees can join a Zoom meeting without even signing into the app, but must register for an account to host a video meeting. Premium versions support Zoom meetings with up to 1,000 participants, call recording, unlimited phone calls and much more. Zoom video conferencing is celebrated for its ease of use, high quality video and audio, and collaboration facilities – and https://www.1investing.in/ the basic version is also completely free of charge. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun owns shares of Cisco Systems, Salesforce.com, and Zoom Video Communications. The Motley Fool owns shares of and recommends Five9, Microsoft, Salesforce.com, and Zoom Video Communications.
Vertiv (VRT) and On (ONON) Are Aggressive Growth Stocks
Zoom makes up almost 7% of its flagship fund, the Ark Innovation ETF, making the Cathie Wood investment its fourth-largest holding. Across all Ark Invest funds, Zoom makes up around 4.5% of the company’s holdings. As mentioned above, on Sept. 30, 2021, Five9 announced that the two parties had mutually agreed to abandon the deal. The company said that the agreement had not received the required number of votes from Five9 shareholders to approve the merger. Department of Justice-led panel, named Team Telecom, was investigating the proposed merger’s potential national security risks.
By the end of yesterday’s trading, the Internet – Software industry had an average PEG ratio of 1.79. At current prices, MNDY stock trades at forward price-to-earnings (P/E) ratio of 101. Although a rich valuation can persist, if bullish sentiment continues, there’s a potential negative catalyst that could drive a sentiment shift. As Hedgeye analyst Andrew Freedman noted in June, Monday.com’s recent subscription price hike could lead to increased churn.
The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.
These markets determine the exchange rates between currencies and often involve complex derivatives such as swaps. Going from the world of stock trading to that of Forex trading requires learning a whole new set of skills. I own some shares of Zoom, but I don’t think it’s the right time to double down on this polarizing stock yet.
With the company just days away from unveiling its latest quarterly results and updates to guidance, you may want to take the cautious route. Instead of holding onto positions into the Aug. 1 earnings release, sell or take profit now. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Investors who believe Zoom will struggle to consolidate market share against platforms like Teams from Microsoft, Webex by Cisco Systems, or even Meet Workspace by Alphabet have a reason to avoid the stock for now. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1. Upgrade to MarketBeat All Access to add more stocks to your watchlist. Insiders that own company stock include Santiago Subotovsky, Eric S Yuan, Velchamy Sankarlingam, Shane Crehan, Aparna Bawa, Jonathan Chadwick, Carl M Eschenbach, Ryan Azus, Kelly Steckelberg and Janine Pelosi. 450 employees have rated Zoom Video Communications Chief Executive Officer Eric S. Yuan on Glassdoor.com. Eric S. Yuan has an approval rating of 97% among the company’s employees.
- Largely, because the issues driving their initial fall from grace are likely to persist.
- Besides the company in question behind the outage, there are other cloud stocks where exiting your position is likely the best move.
- Currencies rise and fall at different rates (for example, the Euro may rise while the U.S. dollar falls) based on geopolitical or economic factors such as natural disasters or elections.
- Admittedly, the company’s results have come nowhere close to matching that expected growth.
Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. dividend per share formula 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.
ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. Zoom Video Communications’ stock was trading at $71.91 at the beginning of the year. Since then, ZM shares have decreased by 15.2% and is now trading at $60.97.