Is it the end for Zoom Video Communications

KayaPlus
2021-11-23

If last year someone told you that $Zoom Video Communications(ZM.US)$ will be trading at just USD 210 a share, no one would have believed you.

Zoom had been one of the pandemic beneficiary companies as we demanded more and a better video conferencing app. During a time where $Alphabet-A(GOOGL.US)$ and $Microsoft(MSFT.US)$ were struggling to optimize their video conferencing app, Zoom emerged as the best option.

Today, due to the slowing down of growth and a rather niche service just centralizing around video conferencing, Zoom share prices are suppressed. Here are a few points to take note of based on their latest Q3-22 results

1. Revenue grew 35% YoY

2. Zoom phone, in particular, saw triple-digit growth YoY, reaching 30 customers with 10k+ paid seats

3. Customers contributing to more than $100k increased by 94%

4. Dollar expansion rate maintains strong at above 130%, which is the 14th consecutive quarter above 130%

5. Increased contribution regionally from EMEA and APAC

Even though the results were spectacular, but with a slowed down in growth, market and analysts have downgraded their previous price targets. Do they have the best in class video conferencing platforms? Yes.

But is the current valuation justified? Food for thought! 


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  • PageDickens
    ·2021-11-24
    I think there are other good products in the video conference industry to compete with zoom. For example, Tencent conference. If zoom cannot be continuously updated, it will be replaced by other competitors.
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  • EricVaughan
    ·2021-11-24
    Zoom is a frequently used video software. But I think the space for future growth is very limited by this app alone without any new updates.
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  • MurrayBulwer
    ·2021-11-24
    Anyway, zoom is still growing. Although its performance did not meet analysts' expectations. But the market space is limited. Isn't it?
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  • AaronJe
    ·2021-11-24
    Exactly, Zoom is competed by msft and cannot provide the service given by Microsoft.
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