Zoom share price outlook: what to expect? IG International

We discount the terminal cash flows to today’s value at a cost of equity of 8.0%. As a long-term investor, I don’t ignore past performance, but I’m generally more interested in where the company is heading. Zoom has provided investors with spectacular growth and returns in the past couple of years; however, I don’t see that continuing into the future. The pullback in pandemic-driven demand, in addition to increased competition from massive tech companies like Microsoft and Alphabet, will challenge Zoom’s business moving from here on out. With growth expected to hit the breaks in the years ahead, the company will likely become less attractive to investors who bought into Zoom’s growth story.

  1. “In the short term, Zoom wants to make meetings more engaging and less stressful, which explains the AR features added recently.
  2. Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
  3. IG International Limited is part of the IG Group and its ultimate parent company is IG Group Holdings Plc.
  4. Its current rating indicates more funds are buying than selling.
  5. Rather than increase revenue, Zoom Video expects gen AI tools to retain and add customers.
  6. Growth in annual recurring revenue for business customers with contracts topping $100,000 is one metric to monitor.

Zoom video communication’s stock made its debut on the NASDAQ under the ticker ‘ZM’ on Thursday the 18th of April 2019. Zoom announced their stock would be priced at anywhere between $32.00 and $35.00. Once the stock was publicly available, the price quickly surged over 80% to $65, before ending its first day of trading at around $62.

Then the COVID-19 pandemic erupted, first in China, then around the world. On Feb. 26, Zoom announced it had already added more new users in the first two months of 2020 than it had in all of 2019. Within a month, as the pandemic spread, office workers suddenly found themselves jumping on daily Zoom calls from the comfort of home in a desperate attempt to keep in touch with colleagues. In 2018 I started Tradamaker a site that specializes in trading resource tutorials. I use my professional background in probability, statistics, risk analysis, uncertainty, pattern recognition, coding and charting to help fellow traders get the most out of online trading software and tools.

With an end-of-year rally, Zoom stock advanced 6% in 2023. The Nasdaq composite shot up 43% amid buzz over generative artificial intelligence technology. The U.S. government has been increasing its scrutiny of Zoom on several fronts. In 2020, the United States charged a China-based Zoom executive with conspiring to disrupt videoconference commemorations of the 1989 Tiananmen Square democracy protests. Zoom is also the focus of several ongoing federal investigations related to its dealings with Beijing, according to the Journal.

Compared to the current share price of US$69.2, the company appears quite good value at a 30% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula – garbage in, garbage out. The company’s earnings report is set to be unveiled on February 26, 2024. Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation multiples.

Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits. Zoom’s valuation has surely contracted, but it’s still not desirable when observing the company’s peer group.

A rough start to 2022 despite strong financial performance

ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. Investors should also note any recent changes to analyst estimates for Zoom Video Communications. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Here, Zoom makes a clear distinction between meeting packages and conferencing packages. A room in currently £39.00 per month per room, and works as an ideal solution for larger https://forexhero.info/ companies who regularly host conferences. Zoom Video Communications (ZM), the video-conferencing company has seen major price increases since the Coronavirus outbreak.

Zoom puts limits on the number of participants in a group call and the length of meetings. Zoom software gets high ratings for ease of use and simplicity following earlier video services that provided jerky images and out-of-sync audio. She joined IDG in 2016 after graduating with a degree in English and American Literature from the University of Kent. Trueman covers collaboration, focusing on videoconferencing, productivity software, future of work and issues around diversity and inclusion in the tech sector. Zoom video conferencing is celebrated for its ease of use, high quality video and audio, and collaboration facilities – and the basic version is also completely free of charge. The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups.

Zoom Stock Rises. Earnings Showed Growth.

As people have returned to offices since Covid rules eased, Zoom has had to offer new products. It has rolled out a few AI-powered tools to compete against its rivals and is also planning to enter two new markets. Zoom Video Communications’ stock was trading at $71.91 at the beginning of the year. Since then, ZM shares have decreased by 13.6% and is now trading at $62.12.

There are currently 2 sell ratings, 11 hold ratings and 5 buy ratings for the stock. The consensus among Wall Street research analysts is that investors should “hold” ZM shares. A hold rating indicates that analysts believe investors should maintain any existing positions they have in ZM, but not buy additional shares or sell existing shares.

Zoom stock analysis – is Zoom stock a good buy?

They already support a rich API set that easily integrates with a number of applications. The platform’s basic plan is free and allows up to 100 users per call. The Zacks Rank system, which mtrading review ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988.

A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing. The Zoom IPO in April 2019 raised $752 million, with shares priced at 36. Zoom Phone, a cloud-calling product rolled out in 2019, lets customers set up group internet phone calls without video. The Zoom Phone replaces traditional business PBX phone systems. Meanwhile, recently told its employees to report to its offices on a more regular basis.

The Zacks Consensus EPS estimate remained stagnant within the past month. Zoom Video Communications currently has a Zacks Rank of #3 (Hold). The investment community will be paying close attention to the earnings performance of Zoom Video Communications in its upcoming release. The company is slated to reveal its earnings on February 26, 2024.

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