Zoom’s stock price has risen 569 percent this year, bringing its market capitalization to $129 billion, making the nine-year-old company more valuable than IBM and twice as valuable as VMware. This makes investors buy zoom stock.
The video chat company said in its earnings report on Monday that sales rose 355 percent year over year, exceeding analysts’ expectations by 33 percent. Following the news, the stock jumped more than 38% on Tuesday. “Another historic quarter,” according to Keybanc analysts.
Here are some of the specifics behind Zoom’s meteoric rise from niche video app to a household name and tech heavyweight today, 16 months after its IPO.
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Astounding revenue, profit, and customer growth:
- Quarterly revenue of $663.5 million is almost nine times what it was two years ago.
- The period’s net income of $185.7 million is more than twice the earnings of the previous six quarters combined.
- In the year, free cash flow rose by 22 times to $373.4 million.
- From a year ago, the number of customers generating $100,000 or more in annual sales more than doubled to 988.
- According to FactSet, Zoom has the highest price-to-sales ratio of 72 for tech companies valued at $100 billion or more. Shopify is ranked 63rd.
- Zoom is valued at 892 times earnings, second only to Salesforce among the biggest technology firms.
Quarterly revenue of $663.5 million is almost nine times what it was two years ago.
The period’s net income of $185.7 million is more than twice the earnings of the previous six quarters combined.
In the year, free cash flow rose by 22 times to $373.4 million. From a year ago, the number of customers generating $100,000 or more in annual sales more than doubled to 988.
According to FactSet, Zoom has the highest price-to-sales ratio of 72 for tech companies valued at $100 billion or more. Shopify is ranked 63rd. Zoom is valued at 892 times earnings, second only to Salesforce among the biggest technology firms.
Zoom stock Analysis
Analysts can’t keep up: following the article, Guggenheim lifted its price target to $450 from $250, citing the “solid beat and boost.”
The “extended ‘Stay at Home’ climate supports continued sales growth,” according to Stifel, which lifted its target to $300 from $180.
BTIG previously lacked a goal and was classified as a keep. After the company “announced another quarter from a distant world,” the firm upgraded its rating to buy and set a $500 price target for the stock.
Piper Sandler raised its goal to $411 from $211, citing “material upside against Street expectations” across all metrics.
The study was dubbed “the “Godfather 2” of tech quarters by DA Davidson, which increased its target to $460 from $240.
How does Zoom make money?
A simple Zoom account is free, and it allows you to hold video meetings with a limited number of people for a limited amount of time. Zoom then provides three additional packages per host, ranging from £11.99 to £15.99* per month. When packages become more costly, the number of participants and meeting lengths are reduced.
They also have extras like cloud recording storage, dedicated support, and customization options. However, as packages become more costly, a minimum number of ‘hosts’ per package is needed. Zoom Rooms is the company’s video conferencing service. Zoom distinguishes between meeting and conferencing packages in this section.
Is Zoom stock a good buy?
Following the coronavirus pandemic, demand for collaboration software like Zoom has reached new heights. The majority of workers work from home, and there is little interaction between companies that deal with one another. A combination of these factors, as well as the probability that social distancing will continue through 2021, could raise Zoom’s revenue.
Many analysts expect that Zoom’s annual sales will rise to about £1 billion by 2021, up from £662 million in 2019. Aside from the coronavirus outbreak, many businesses are becoming more distant.
Investors buy Zoom Video Communications, Inc. (ZM) as they see zoom has outplayed most of its competitors. Zoom did this while there were very big names in the market like Microsoft’s Skype and Cisco Webex. Zoom video communication has beaten the competition In the last 2 years. Since its IPO in April 2019 zoom’s stock price has increased more than 350% per person making its c.e.o and co-founder eric worth $20 billion.