![]() Bureau of Labor Statistics states that 11% - more than 1-in-10 - of employees are still working from home due to the pandemic. The company is also adding larger clientele, with customers that contribute more than $100,000 in revenue increasing 94% in the third quarter from 1,289 to 2,507.Įarly January data released by the U.S. Zoom Phone, an all-encompassing app for phone, video, meeting, and chat, saw triple digit revenue growth in the third quarter of 2022. Zoom's most recent quarterly results also offer several positive takeaways. ![]() #Zoom stock fullZoom saw its levered free cash flow increase 1,122% to $1.4 billion for the full fiscal year 2021. Generating cash flow was not a problem in 2021 either. With virtually no debt of $97.4 million, Zoom has $1.3 billion in cash and equivalents and $5.1 billion in total equity. The company's balance sheet is perhaps what impresses me the most. Non-GAAP EPS is also forecasted to grow at 45% to $4.85, up from $3.34 a year ago. Management guidance suggests that revenue for the full year fiscal year 2022 will grow 54% to around $4.1 billion. In its fiscal year 2021, the company generated $2.7 billion in revenue, representing a very impressive 326% growth year-over-year. Zoom's growth has been spectacular in previous years, boasting a three-year revenue compound annual growth rate of 160%. On that note, I don't view Zoom as an optimal investment in today's market. And despite the company's impressive market share, steady competition will continue to be a threat to Zoom's operational performance. Zoom's valuation has certainly shrunk in recent months, but shrinking doesn't necessarily mean it's cheap now. For this reason, I do not think investors can expect to see the type of gains that the company was once able to provide. #Zoom stock softwareSelloffs are often necessary in order to correct stocks that have reached unjustifiable valuations.Ģ021 was an impressive year to say the least for the video software company, but the days of such robust growth for Zoom are behind us. ![]() It's also important to mention that Zoom's decline in value is largely part of a broader selloff of high growth technology stocks stemming from the Federal Reserve's plan to raise interest rates. Still, the recent downward trend in Zoom's share price has many people wondering if the company's growth story is over. The company's equity value was right around $20 billion heading into 2020, so the stock is still over two times more valuable than it was prior to the pandemic. In the past six months, the company's share price has dipped 59%, dragging Zoom's market cap down to $46.4 billion. Zoom (NASDAQ: NASDAQ: ZM), the video communications platform, saw its market capitalization reach north of $160 billion in October 2020 as remote work prevailed in response to the pandemic. 10'000 Hours/DigitalVision via Getty Images Introduction ![]()
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