Zoom’s Rise to Fame
The pandemic made Zoom Video Communications (ZM) into a household name and an investor favorite almost overnight. Over the past year, people around the world have turned to the platform for work, school, and socializing.
Some investors have worried that Zoom will not be nearly as important for daily life post-pandemic. However, a better-than-expected earnings report earlier this week lifted Zoom’s stock price. Many are forecasting growth for the company even after the pandemic subsides.
Zoom’s Stock Price Over the Past Year
Since news of the first COVID-19 vaccine breakthroughs in early November, Zoom’s stock price has fallen by about 18%. From the first of the year up until that point, Zoom’s share price was up 635%. After Monday’s earnings report, Zoom stock spiked again.But yesterday, shares were down about 9% at market close.
Zoom shared that its revenue grew 369% year-over-year during the quarter that ended on January 31. Zoom also announced that it expects to see 42% revenue growth during the fiscal year ahead, even as vaccine rollout unfolds and people are able to return to some pre-pandemic routines.
Zoom’s Corporate Customers Are Likely Here to Stay
Some analysts expect that Zoom’s individual customer base will shrink after the pandemic as people will no longer need the platform for birthday parties, happy hours, and other remote social events. However, Zoom’s corporate customers may be more likely to continue paying for the service.
The number of Zoom customers paying more than $100,000 per year climbed 156% between the quarter which ended in January and the same period a year ago. Many corporations have decided to allow employees to work remotely for the long-term. Additionally, companies may be less likely to want to spend money on business travel now that people have become so accustomed to Zoom calls. Though Zoom’s role in people’s lives will likely change over the coming year, many expect that the platform will stay relevant—especially in the context of work.
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