• The company presented outgoing economic reports for the last quarter of 2020, which surpassed analysts’ forecasts. Zoom continues to maintain a positive and optimistic net profit regarding the way forward.
• In light of the change created by the corona plague, there is a need for remote work / learning platforms. The question is whether Zoom will be able to maintain the existing growth rate with the plague subsiding.
• Technically the stock is trading in a negative trend for the coming week.
|
Company name / securities |
Ticker |
price |
recommendation |
support |
resistance |
|
Zoom Video Comm |
ZM |
311.86 |
sale |
287.88 |
413.50 |
Technically the stock is in the coming week in a strong negative trend with most indicators supporting a price drop and giving a sell rating. The Oscillators indicator is Neutral while the momentum indicator for the stock is Sell.
Company description
Zoom is an American company that is considered one of the leaders in the market as a response to holding remote conference calls and for conference rooms in organizations. The company has been around since 2011 but entered the consciousness of people massively only this year, with the outbreak of the corona plague. In fact, it is such a popular system that it has become synonymous with distance learning for students, or for working remotely in work institutions.
The company’s founder, Eric Yuan, was previously a senior engineer at Cisco Systems, which acquired Webex, which previously developed a product in the field of video conferencing. Cisco and Microsoft’s Webex have in recent years been considered monopolies in the field of video calling, but Zoom has managed to break this duopoly by creating a good user experience. The interface of Zoom is more friendly with options that were not there before such as writing on a virtual board and more. As part of the experience, it can also be said that Zoom’s software is more stable compared to competitors and in addition the system requires less bandwidth. Another advantage is that the system knows how to work with quite a few operating systems and a capability that has made Zoom even more popular.
In April 2019, Zoom was issued as a public company in NASDAQ. During the IPO, the value of its shares rose by more than 72% when the initial public offering price was $ 36.
On May 13, 2020, after reviews received by the company and security breaches, Zoom acquired the startup Keybase, which specializes in encryption for an unknown amount.
With the company’s growth and the share price rising, Zoom entered the Nasdaq 100 and today has a value of $ 90 billion and its share price stands at $ 311.86 with a historical earnings multiple of 138.45.
Financial results
Zoom revenues for the quarter ended January 2020 were $ 882 million compared to expectations of $ 811 million, compared to revenues of $ 188 million in the corresponding quarter last year. Adjusted earnings per share by 79 agorot exceeded expected earnings and totaled $ 1.22 per share, compared to adjusted earnings per share of $ 0.15 per share last year.
Zoom has benefited from the social distance created by the corona plague and the transition of bodies of various sizes and educational institutions to working remotely in the video configuration provided by the company. The increase in the number of corona cases around the world required to expand the closures and people had no choice, they had to work remotely.
The company posted a fourth consecutive quarter of profit after it managed to become profitable. Net income was about $ 260 million. The company’s total cash accumulated to a record $ 4.24 billion.
What does the future hold for the company?
2020 broke the glass ceiling of digitalization. A year that has succeeded in bringing innovations to which humanity has longed for many years such as, the ability to separate doing and working in a particular place physically and the location of the workers is indeed an impressive achievement and Zoom has certainly been a key player in the process.
Despite Zoom’s strong performance this year, many investors fear that Zoom will not be able to maintain the strong positive momentum of 2020 as the Corona plague fades. Zoom, led by CEO Eric Yuan, understands the expected changes in the market and is working to create a broader product mix such as a cloud phone system, to attract large companies as well as small and medium-sized businesses. Also below.
“We believe we are in a good position for strong growth with our innovative video calling platform, on which our customers can rely, manage and grow their business, our well-known international brand, and a team focused on our customers,” Yuan said in publishing the reports.
The demand for remote work will probably remain and if video continues to be a key element in daily life and is further assimilated into workplaces, schools and more, zoom will continue to maintain its place. Zoom will benefit from this assuming that competitors do not outperform it in terms of service level and price, presumably, and will report continued growth.
Financial and financial data
