Zoom shares went up over 60% in the past year owing to the Covid-19 pandemic but they dropped 20% in the past three months.

Zoom Video Communications Inc (NASDAQ: ZM) stock had gained approximately 2% to trade around $334.40 as of Jun 1, 2021, 7:59 p.m. EDT. And in the pre-market, ZM still demonstrates a 2% rise. The spike was attributed to the better than anticipated Zoom Q1 2022 earnings results.

During the first quarter, Zoom recorded adjusted earnings per share of $1.31 contrary to Refinitiv’s estimated $0.99. Notably, the company’s first-quarter total revenue was reportedly $956.2 million, up 191% year over year and well above the estimated $906 million.

Additionally, Zoom has approximately 497,000 customers, which compared to 2020, represents an immense growth of 470.33% in customer base. The number of customers contributed to more than $100,000 in TTM revenue, up 160% year over year. Zoom has also registered about 300 million participants meeting daily inclusive of those using free and paid accounts. This represents a 2900% increase compared to 10 million participants by the end of 2019.

Furthermore, it has more than 10 employees, up 87% year over year and it earns about $599,590 revenue per employee.

Zoom Video Stock and Company’s Performance in Q1

Michael Bapis, Vios Advisors at Rockefeller Capital managing director, expressed his optimism in the tech company keeping its relevance even in the face of massive economic re-opening. However, he cautioned that this is not a signal to buy.

Bapis also questioned some aspects of Zoom’s future including monetization in stiff competition, monetization of the future, and the nature of their subscriptions. For these reasons, he stated he would want to exercise some patience for the next one or two quarters and monitor the company’s performance before making any hasty choices. Nevertheless, Bapis reiterated his confidence with the statement, “…video workplace is here to stay.”

CEO and founder of TradingAnalysis.com, Todd Gordon backed up Bapis’s comments on Zoom’s future. He is cautious about Zoom’s near-term and not willing to purchase shares at the current levels. Moreover, Gordon emphasized not selling at the moment, saying that reentry is possible, and the company has upstanding customer service and margins.

Gordon reported being keeping an eye on customers’ attrition, particularly those from small-scale businesses. Enterprises with between one and ten employees would rather meet up in person to have more intimate discussions, especially with the lift of shelter in place orders following Covid-19 vaccination.

Zoom shares went up over 60% in the past year owing to the Covid-19 pandemic but they dropped 20% in the past three months. In Wednesday’s pre-market session, Zoom Video stock was at $334.40, a $6.68 increase (2.04%). Recent stock consolidation has been attributed to increased coronavirus infections in some countries and the massive rollout of vaccination in others.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
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