- Stories Q3 2021 outcomes on Monday, Nov. 30, after the shut
- Income expectation: $693 million
- EPS expectation: $0.76
No doubt, Zoom Video Communications (NASDAQ:) has been one of many largest beneficiaries of the worldwide COVID-19 pandemic. Hundreds of thousands of staff and college students flocked to its video-conferencing service as governments worldwide mandated work-from-home restrictions. Right now’s earnings report will probably mirror this increase, validating buyers’ extraordinarily bullish stance on the stock.
Analysts, on common, expect gross sales to soar greater than 300% to $693 million within the firm’s fiscal 2021 third-quarter, whereas revenue per share can have swelled to $0.76 a share from simply $0.09 . That sort of development may make the San Jose, California-based firm one of many largest producers of development amongst corporations in 2020.
Buoyed by this spectacular efficiency, Zoom shares have emerged one of many best-performing NASDAQ stocks this 12 months, gaining about 600%, taking Zoom’s market cap to $134 billion. After this 12 months’s rally, Zoom is now worth greater than 140-year-old Worldwide Enterprise Machines (NYSE:) and the high-flying chipmaker Superior Micro Units (NASDAQ:).
For buyers who’re simply now considering of including Zoom to their portfolio, the most important query is whether or not this pandemic-triggered increase will proceed as soon as the virus is contained. Zoom administration stays very optimistic, saying that is just the start. “Zoom is built for this moment and beyond,” Chief Government Officer Eric Yuan mentioned in a latest assertion.
“We have the platform to support what the world needs—today, tomorrow, and well into the future.”
Extra Upside
Analysts on the Street appear to agree. Many grew to become extra bullish on the stock after the corporate introduced the most recent upgrades to its choices on its October, “Zoomtopia event.”
(BofA) Securities analyst Nikolay Beliov reiterated his purchase score on Zoom and raised his price goal to $570 from $475, saying the corporate is in an early stage of monetizing the biggest World 2,000 corporations and is making “significant progress” on its Zoom Cellphone providing.
Even with its recognition amongst shoppers, the corporate believes that almost all of its future development will come from companies, in a market the place it might thrive by combining videoconferencing, cellphone calls and textual content messaging on one platform and promote it to corporations seeking to modernize their communications programs.
“We believe Zoom’s increasing relevance and continued good execution translate into both near-term and long-term upside,” Beliov wrote in a notice to shoppers. “Furthermore, new product releases and enhanced capabilities signal Zoom’s ambition to become a more holistic collaboration and workflow platform, vs a video and [unified communications as a service] solution,” Beliov added.
D.A. Davidson’s Rishi Jaluria is one other analyst who raised Zoom’s price goal to $600 from $460 after attending the Zoomtopia occasion, saying the corporate has an enormous alternative to develop.
“Our primary takeaway was though [Zoom] has had robust traction in COVID-19, it’s nonetheless underpenetrated and faces an enormous market alternative with runway for sustained development post-COVID-19,” Jaluria wrote.
Zoom, which competes with videoconferencing providers from Microsoft (NASDAQ:) and Alphabet’s Google (NASDAQ:), final month launched new instruments to assist software program builders higher combine Zoom into their merchandise. Among the many choices launched is Zapps, that are apps that customers can entry with out leaving the Zoom platform, together with instruments from Slack Applied sciences (NYSE:)
Backside Line
Shares of Zoom have misplaced some momentum after this 12 months’s highly effective rally. Nonetheless, for long-term buyers, this weak point needs to be thought of a shopping for alternative. The corporate stays in robust development mode, which is unlikely to gradual given the growing want for individuals who will probably choose to work and research remotely even after the pandemic fades.
