Is Zoom Video Stock A Good Long-Term Investment?

: ZM | Zoom Video Communications, Inc. -  News, Ratings, and Charts

Following positive news related to the development and deployment of coronavirus vaccines, Zoom’s (ZM) stock fell sharply. While the demand for the company’s services is not expected to decline anytime soon—because the remote working and learning trends adopted during the pandemic may continue indefinitely—growing competition might nevertheless limit the stock’s upside in the coming months.

Amid the COVID-19 pandemic, Zoom Video Communications, Inc. (ZM) became one of the most popular companies. It provides a video-first communication platform and web conferencing services. The stock skyrocketed during the pandemic as companies shifted rapidly to a virtual structure. Even educational classes were (and are) being held remotely using the Zoom platform.

However, with the progress on the coronavirus vaccine front, the stock took on investors’ a hit on investors anticipation of a decline in demand for the company’s services with a gradual re-opening of the economy. The stock has declined 29.3% since hitting its 52-week high in October. Also, with many tech leaders now launching similar services, the company is facing stiff competition.

So, it might be difficult for Zoom to maintain its lead in the videoconferencing space in the months ahead. Lack of investor optimism and a potential downside based on several other factors have made our proprietary system rate ZM as a “Sell.”

Here is how our proprietary POWR Ratings system evaluates ZM:

Trade Grade: F

ZM is currently trading slightly above its 200-day moving average of $359.82, but below its 50-day moving average of $426.73. The stock’s 2.8% loss over the past three months reflects short-term bearishness.

The company’s revenue has increased 366.5% year-over-year to $777.2 million for the quarter ended October 31, 2020. While non-GAAP net income increased 1079.4% year-over-year to $297.2 million, non-GAAP EPS increased 1000% year-over-year to $0.99. Its customers with more than 10 employees have increased roughly 485% year-over-year to 433,700.

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Texan Hunter 4 weeks ago Member's comment

Short answer - hell no!!!

Roger Keats 4 weeks ago Member's comment

sell and rotate into another security