– Zoom stock prediction 2021 – none:
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All Analysts Top Analysts. Strong Buy. Strong Sell. Parker Lane. Matthew Harrigan. Tyler Radke. Matthew Niknam.
Rishi Jaluria. Ryan Macwilliams. Karl Keirstead. Keith Weiss. Matt VanVliet. Forecast return on equity Is ZM forecast to generate an efficient return? ZM’s Zoom stock prediction 2021 – none: on Equity is Forecast return on zoom stock prediction 2021 – none: Is ZM forecast to generate an efficient return on assets?
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– Zoom (ZM) stock forecast: Bargain opportunity or slippery slope?
Dec 20, · ZM stock target price. Zoom has a median target price of $ which is an almost 39% premium over its yesterday’s closing prices. Its highest target price is $ which is a premium of % while the lowest target price of $ is similar to current prices. Wall Street opinion is divided over the stock though and of the 31 analysts. Dec 29, · S hares of Zoom Video Communications have been cooling down in recent months. In mid-October, the video conference specialist’s stock peaked at a year-to-date gain of %. Today, Zoom’s returns. Dec 06, · As of 6 December , Wallet Investor shared a bearish Zoom share price forecast, noting: “If you are looking for stocks with good return, Zoom Video Communications Inc – Class A stock can be a bad, high-risk 1-year investment option.” Its one-year Zoom stock forecast stands at $
Zoom’s Revenue Forecast Tops Estimates Amid Concerns
I initiated coverage on Zoom with my article published on April 15, This article provides an update on the growth outlook for the company. Zoom’s top line is expected to grow in calendar year or fiscal year , but its stock price might not increase this year as result of lower growth expectations.
Zoom stock is not a good Buy for me now, as its rich valuations are not aligned with the company’s slower pace of growth going forward. However, I am positive on Zoom Phone becoming a key growth driver for the company in time to come. Considering these factors, I continue to rate Zoom’s shares as Neutral. It is relevant to note Zoom’s stock price reaction post-1Q FY YE January 31, results announcement, which was released on June 1, after trading hours.
Initially, ZM’s share price declined marginally by ZM’s subsequent share price increase in the past two weeks is likely due to selected sell-side analyst bullishness and the launch of new product solutions relating to Zoom Phone.
Last week, Zoom Video Communications was named as one of the software industry picks by RBC, considering that its products are “a critical component of the coming hybrid work norm” and that “the sharp pullback has created an attractive entry point” for the stock.
Earlier on June 9, , Zoom revealed that it has introduced the new Zoom Phone Appliances, which is “an all-in-one desk phone solution for HD video meetings, phone calls, and interactive whiteboarding.
In my April initiation article for Zoom, I had noted that “increasing revenue from new products like Zoom Phone” is a key growth driver for the company. The new Zoom Phone Appliances, which the company refers to as a “new device category” for the Zoom Phone at its recent earnings call, is expected to further boost the sales of the Zoom Phone in the near future. Source: Zoom’s June 9, Press Release. I evaluate Zoom’s recent 1Q FY financial performance and its growth prospects for calendar year and fiscal year February 1, to January 31, in the subsequent section.
Zoom’s financial performance in the first quarter of fiscal was excellent on a YoY comparison and exceeded market expectations. At the company’s 1Q FY results briefing on June 1, , Zoom Video Communications highlighted that “revenue upside in the quarter carried through to the bottom line “, which implied that operating leverage was the key driver of ZM’s significant improvement in profitability in the recent quarter.
Apart from headline financial numbers, there are two key metrics to watch for Zoom. One key metric is the revenue contribution from Zoom’s clients with less than 10 staff. In other words, this client segment drove Zoom’s growth in 1Q FY , but that might not be sustainable.
In my initiation article published in April , I mentioned that I “expect Zoom’s churn rate for its customer cohort with less than 10 staff to be significantly higher than its customer cohort with more than 10 employees” going forward. This is aligned with the company management’s comments at the recent 1Q FY earnings call, where Zoom stressed that churn for the specific customer segment with less than 10 employees could be “more volatile as economies continue to reopen” because most of them are on “monthly plans” as opposed to yearly subscriptions.
Another key metric is Zoom Phone sales. On a cumulative basis, Zoom Phone sales have increased from approximately one million seats as of end calendar year to around 1. With expectations that more people could be returning to offices in time to come as and when the pandemic is contained, the increased sales for the Zoom Phone could help to offset the reduced demand for Zoom Meetings.
Also, as highlighted in the preceding section of this article, the introduction of new Zoom Phone Appliances with improved functionality catering to office needs like the interactive whiteboarding feature could help to drive the growth in Zoom Phone sales in the future. In summary, a higher-than-expected churn rate for Zoom’s customer segment with less than 10 staff is a key downside risk, while Zoom Phone sales could surprise on the upside and boost the company’s top line. Looking ahead, there is little doubt that Zoom’s revenue and earnings will be higher in calendar year or fiscal year , but it is the future pace of growth that matters.
The forward-looking numbers for the full-year are realistic, taking into account the strong 1Q FY results and the expected slow-down in subsequent quarters as WFH Work-From-Home tailwinds ease. Zoom’s slower pace of growth in the next two years is not surprising. The churn for ZM’s client segment with fewer than 10 staff will likely increase going forward and become a drag on the company’s overall sales growth.
At the same time, it is reasonable to assume that Zoom still derives most of its revenue from its core Zoom Meetings product, and it will take some time for Zoom Phone to be a significant contributor to the company’s top line. In other words, Zoom’s revenue and net profit will go up in calendar year , but ZM’s stock price might not go up for the rest of the year as investors gradually price in lower growth expectations for the stock.
Despite this, Zoom’s forward Enterprise Value-to-Revenue valuations are the second highest in the peer group. As such, I don’t view Zoom’s valuations as sufficiently attractive to justify a Buy rating. Sign up here to get started today! Those who believe that the pendulum will move in one direction forever or reside at an extreme forever eventually will lose huge sums. Those who understand the pendulum’s behavior can benefit enormously. I wrote this article myself, and it expresses my own opinions.
I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article. The Value Pendulum Marketplace. I think Zoom’s shares are a Hold now, rather than a Buy.
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