Why is Zoom so Cheap?

The earnings beat was good enough.

Andrew Willis 3 December, 2021 | 4:58AM
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Andrew Willis: Last week, Zoom (ZM)’s earnings didn’t go over too well. Almost 15% of the stock’s value was wiped out in one day. Why?

We’re nearing the end of 2021. The company capitalized on the rapid adoption of its video chat software last year, and made a stratospheric stock market launch. And it continues to grow revenue around 35% year over year.

Senior equity analyst Dan Romanoff is impressed with Zoom’s ability to deliver in terms of both growth and margins. He sees a long runway of growth ahead for the company as it evolves into a unified communications platform with chat offerings and customer engagement features for businesses. And that signature simplicity that caught on last year continues to easily pick up new customers, which you might note account for over 70% of new revenue…

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Zoom Video Communications Inc145.89 USD-4.62Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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