That’s because it’s video conference platform is: However, it’s not hard to imagine why Zoom will sustain its business. Imagine how many masks people will be buying in a pandemic-free world. Those will see an immediate decline once Covid-19 is the rearview mirror. PPE manufacturers and other companies created new business lines for the pandemic. However, Zoom only needed the pandemic to fuel existing growth and a trend that was already in place. That’s particularly true because of the optics, which is that Zoom Video is up because of Covid-19.Ĭovid-19 did accelerate Zoom’s business and act as a major positive catalyst. Moving Forward With ZM StockĪfter such a big move in a short amount of time, ZM stock isn’t an easy one for investors. So earnings estimates have climbed 10-fold, while revenue estimates have increased about four-fold. Those estimates now sit at $2.58 billion and and $2.90 per share, respectively. Short of a pandemic, there was simply no other way for the company to realize so much demand so quickly.įor example, analysts were expecting about $610 million in sales and earnings of 27 cents per share this year. If bulls are lucky, that’s exactly what will happen, given them a better buying opportunity.īecause Covid-19 forced many meetings into the virtual space - be it for business or for family and friends - Zoom Video engulfed unheard of levels of growth. Although ZM stock has been pulling back, currently down 34.7% from those highs and flirting with a potential breakdown. Shares rallied more than 750% from the start of the year to the Oct. This stock simply went bonkers - and rightfully so. When the coronavirus came along, it’s as if someone waltzed up to a bonfire and doused it in gasoline. That was the case bulls were making as we entered 2020. But why should ZM stock come at a discount if it had all of these positives? The only thing not to like here was the valuation. It had (and still has) strong revenue and earnings growth, was profitable and free cash flow positive, and had a strong balance sheet. However, it checked all the boxes for growth investors.
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