S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
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Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
Market Wizard Reveals: The One Ticker Retirement Plan (Ad)pixel
Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
Trade With Artificial Intelligence for Happiness (Ad)pixel
Tesla sales bounce back in Q3 but fall short of estimates
Allies aim for risky Russian oil price cap as winter nears
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
Market Wizard Reveals: The One Ticker Retirement Plan (Ad)pixel
Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
Market Wizard Reveals: The One Ticker Retirement Plan (Ad)pixel
Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
Trade With Artificial Intelligence for Happiness (Ad)pixel
Tesla sales bounce back in Q3 but fall short of estimates
Allies aim for risky Russian oil price cap as winter nears
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
Market Wizard Reveals: The One Ticker Retirement Plan (Ad)pixel
Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
Market Wizard Reveals: The One Ticker Retirement Plan (Ad)pixel
Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
Trade With Artificial Intelligence for Happiness (Ad)pixel
Tesla sales bounce back in Q3 but fall short of estimates
Allies aim for risky Russian oil price cap as winter nears
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Why This Bear Market Is Not Even Close to Being Done…
Market Wizard Reveals: The One Ticker Retirement Plan (Ad)pixel
Denmark says Nord Stream 1 natural gas pipeline has also stopped leaking
Denmark says Nord Stream 1 pipelines stop leaking
Market Wizard Reveals: The One Ticker Retirement Plan (Ad)pixel
Brazil holds historic election with Lula against Bolsonaro
US shift away from coal hits tribal community in New Mexico
Trade With Artificial Intelligence for Happiness (Ad)pixel
Tesla sales bounce back in Q3 but fall short of estimates
Allies aim for risky Russian oil price cap as winter nears

Where Is Zoom Video (NASDAQ: ZM) Going Next?

Where Is Zoom Video (NASDAQ: ZM) Going Next?Few companies encapsulated 2020 and the market’s surprising reaction to the pandemic more than Zoom Video (NASDAQ: ZM). Having only IPO’d the previous spring, they came into this new decade close to all-time lows but quickly started realizing their potential once offices shut and employees started working from home. Shares jumped 150% from January to March 2020, but that was really only a sign of what was to come. 

At their peak, around October of last year, they were up a staggering 800% on the year. That was also right around when COVID vaccines were starting to be approved and the momentum in equities swung from growth and tech names to what was still beaten down value, travel, and retail names. Their shares are currently trading down around 40% from their all-time high but to be fair have held onto much of their 2020 gains. Having consolidated and traded sideways for much of 2021, it’s probably a good time to take stock of their potential for the second half of this year and beyond. 

Triple-Digit Growth

Earlier this month the company reported their Q1 earnings, and both Wall Street and Main Street alike got some good insight into their revenue engine and what might be in store over the coming months. Zoom’s Q1 EPS smashed analyst expectations while revenue also came in ahead of the consensus with an impressive 191% year on year jump. Keep in mind that this time last year the same print was up 170% so they can’t be accused of slowing down their expansion. Free cash flow was 62% higher than expected and management also guided higher for their Q2 numbers and their full-year 2021 numbers. 


By any measure, it was a stellar report, with plenty of indications that they made the most of the hype that surrounded the stock last year and has captured market share both upstream and downstream. The number of customers paying more than $100,000 a year was up 160% compared to Q1 of last year while the number of customers with more than 10 employees was up 80% over the same period. 

Zoom’s CEO, Eric Yuan, struck a deservedly bullish tone with the release when he said “we kicked off the fiscal year with a very strong first quarter, posting 191% total year-over-year revenue growth combined with strong profitability and cash flow. Our steadfast commitment to empowering customers to work and learn from anywhere with our expansive, innovative, and frictionless video communications platform continued to drive our results. With this solid start, we are pleased to raise our total guidance range to $3.975 billion to $3.990 billion for the full fiscal year”.

Though it took a few sessions, the bulls quickly gained control after the release and shares have rallied more than 8% in the past week, putting them up 25% over the past month. For all that though, there are still plenty of voices calling for caution, not least because of the company’s triple digit price-to-earnings (PE) ratio. This was undoubtedly one of the reasons Zoom saw its shares slide in the first half this year, as growing concerns about a fast-growing inflation print took the shine of tech stocks for many investors. But even then there was no catastrophic retracing towards pre-COVID levels and shares look to be comfortably treading water around the same levels they traded at last September.

Getting Involved

Considering the vaccine rollout is inching towards completion and employees are starting to return to the office, there’s a lot to be said for the fact that Zoom shares are trending upwards at the same time. We also saw the major indices shrug off a 5% inflation print this week, as they all closed in on fresh all-time highs. If this is the new normal, then it looks good on Zoom. 

Investors know it might be a while before the green field opportunity of 2020 repeats itself, but Zoom looks to have made the most of it and has set itself up for continued success. It might be a painful hold if you only bought into their shares last October, but for those of us on the sidelines now and considering a position, there’s a lot to like.

Where Is Zoom Video (NASDAQ: ZM) Going Next?

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Zoom Video Communications (ZM)
2.8371 of 5 stars
$73.59-1.2%N/A22.78Hold$136.03
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Zoom Video Communications right now?

Before you consider Zoom Video Communications, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Zoom Video Communications wasn't on the list.

While Zoom Video Communications currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Sam Quirke

About Sam Quirke

Contributing Author: Technical Analysis

After graduating with a degree in finance, Sam worked for a trading technology company as an analyst before joining a prop firm. Here he traded energy, commodity and index futures while utilizing a combination of technical and fundamental analysis.Today he manages his own stock and option portfolio which is made up of longer term positions and shorter term momentum plays. He lives in Chicago.
Contact Sam Quirke via email at s.quirke.us@gmail.com.
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