Why zoom stock is falling. Price of Zoom’s shares 2020-2022

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Zoom Stock Plunged. Is This a Buying Opportunity? | The Motley Fool.Zoom shares fall after results as Wall Street turns cautious on growth – The Economic Times

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Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources , and more. Learn More. Capable video-conferencing software became an absolute necessity for businesses overnight, and the path of least resistance was Zoom’s easy-to-start and easy-to-use product.

Zoom’s revenue soared as businesses scrambled to enable employees to work from home. Even though Zoom’s financial results continued to impress through much of , the stock has been steadily declining for the past year.

The stock market is forward looking. It’s clear that investors have been worried about what will happen to Zoom once the pandemic is over, and that worry has contributed to the stock’s decline. The video-conferencing software market isn’t going away, and the pandemic almost certainly accelerated adoption of the technology. But the end of the pandemic represents a sea change for Zoom. In the first months of the pandemic, businesses that abruptly found themselves with remote employees had no choice but to pay for video-conferencing software.

It didn’t matter how much it cost; what mattered was getting up and running quickly. There are plenty of video-conferencing options, but many of them are geared toward larger enterprises or tied to legacy systems. If a company was already a Cisco customer, using WebEx made sense. For many companies, though, Zoom was the obvious choice. Even though the pandemic isn’t over, the environment today is very different.

Companies that absolutely needed to adopt Zoom’s software have already done so. Some of those companies are starting to bring workers back to the office. While remote work will probably be more prevalent in the post-pandemic world than in the past, plenty of workers will no longer be using Zoom as often. Companies that frantically adopted Zoom last year can now take a breath and decide whether it’s the best solution. The urgency is gone. Zoom is starting to see smaller customers drop off the platform , and enterprise customers are taking more time to make buying decisions.

The bonanza is over. Zoom expects to report lower revenue in its third quarter than it reported in its second quarter. It’s possible that Zoom’s revenue will eventually start to decline on a year-over-year basis as its customers adjust to the post-pandemic world. The company is already seeing some of its pandemic-era growth start to unwind. Where the post-pandemic baseline for Zoom ends up settling is anyone’s guess. The all-stock deal was attractive for Five9 shareholders at the time of the offer, but not so much once Zoom’s stock tanked.

It will be difficult for Zoom to make any major acquisitions using its stock as currency after the Five9 deal collapsed. The time for that was probably last year when the stock was soaring and confidence that it would keep soaring was high. The window of opportunity for Zoom to use its inflated stock to diversify via acquisitions appears to be closed. Zoom stock is expensive based on its full-year guidance, but it’s not that expensive. That guidance represents a price-to-sales ratio of about 19 and a price-to-earnings ratio of about Expensive, yes, but not crazy for a fast-growing company.

If Zoom stops being a fast-growing company — which looks like will probably be the case at least for a while as the pandemic ends — all bets are off. Will investors be willing to pay nearly 20 times sales for a software company that isn’t growing much? While Zoom is producing hefty profits today, that may not remain the case. If large numbers of businesses are essentially forced to pay for your software, of course you’re going to be extremely profitable.

As the pandemic ends, so does the absolute necessity of Zoom. None of this is to say that Zoom is a bad company. Its product is easy to use and would have probably disrupted the video-conferencing market, even without a global pandemic. But the stock is pricing in a lot of growth, and it doesn’t look like Zoom will be able to deliver.

As growth grinds to a halt and margins slump, Zoom stock could fall off another cliff as investors reevaluate the pandemic darling. Cost basis and return based on previous market day close. Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of Discounted offers are only available to new members.

Calculated by Time-Weighted Return since Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

Premium Services. Stock Advisor. View Our Services. Our Purpose:. Latest Stock Picks. Key Points. The company’s acquisition of Five9 fell apart, throwing a wrench in its plan to diversify revenue.

Zoom stock has already been cut in half but could keep falling as growth halts and profits sink. Today’s Change. Current Price. The pandemic darling has been tumbling for a year, and there could be more pain to come for shareholders. Image source: Getty Images. Zoom Video Communications. Motley Fool Returns Market-beating stocks from our award-winning service.

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– Why zoom stock is falling

 

The Street is unclear on how to value Zoom as its growth slows with people returning to offices and schools, despite the lingering pandemic. So the only course of action right now it seems — sell Zoom’s stock ZM and wait for more stable waters.

Radke called the earnings report disappointing. The steep sell-off pushed whg of Zoom into the red for the past year, down about 2.

Added Steckelberg on the growth slowdown, “When we look out through what we have seen is a slowdown in the online segment of the business, which again, even though the pandemic seems to be far from over, we are happy that people are feeling more comfortable out traveling. And that’s really where we’re seeing the slowdown. Why zoom stock is falling if you ozom all the way up to when we gave guidance at the beginning of the year, we had expected that towards the end of the stofk, but it’s just happened a little bit more quickly than we expected.

And we, of course, feel why zoom stock is falling that people are out moving around the world. But It’s certainly creating some headwinds, as we’ve us, in the online segment of our business. Analysts are taking a mostly guarded view on Zoom на этой странице the near-term, even though many acknowledge the company will benefit from the long-term shift to hybrid work.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Read the latest financial and business news from Yahoo Finance. Stock splits typically have led to oversized returns, says Bank of America. Look beyond the popular growth stocks.

A healthy stream of whg awaits. Europe, where Tesla has just opened a production site, is an important market for the electric vehicle manufacturer and its CEO. It’s certainly understandable; getting stck shares of your favorite company can bring a smile to the faces of even the most stoic among us.

It’s also true that companies that announce their intentions to split their stock tend sock see their share prices run up as the split date approaches. All this buying can drive share prices up, flaling in more momentum traders and adding fuel to the fire.

Energy prices are soaring. Why zoom stock is falling bargain-hunter Buffett continues to bet on big oil. Stocks fslling last week, but was it constructive? Tesla tumbled on Elon Why zoom stock is falling “super bad” warning. Apple WWDC is due.

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More content below. In this article:. Story continues. Read more. Recommended Stories. The Independent. Motley Fool. Investor’s Zoim Daily. Yahoo Finance.

 
 

Why zoom stock is falling.Zoom Stock Plunged. Is This a Buying Opportunity?

 
 
Zoom Video Communications Inc’s third-quarter revenue growth rate slowed to 35% as demand for its video-conferencing tools eased from the. Shares of Zoom have underperformed the broader market over the past year. The stock outperformed through the first three months of the year.

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