Zoom Stock Forecast: Zoom Stock Fundamental Analysis

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What is zoom stock forecast? Zoom stock popped after the company reported fourth-quarter earnings and revenue for the January quarter and its full-year, fiscal 2022 guidance also came in above expectations. Even so, the size of its quarterly revenue beat continued to moderate.

The company may be prepping for an acquisition. It raised $2 billion in a secondary offering on the 15th of January, 2021. Zoom stock already had $1.9 billion in cash on its balance sheet as of 31st of October, 2020.

When the coronavirus crisis eases, retaining small businesses as well as corporate accounts will be one key to Zoom’s continued success. Another will be its ability to convert free users into paying subscribers Customer turnover is a risk.

Zoom garners about 50% of revenue from monthly payers. Zoom aims to convert monthly business subscribers to annual contracts. In the January quarter, Zoom added a record 355 customers that will bring in over $100,000 in revenue annually.

Zoom Stock Forecast

Zoom Stock Forecast

Amid Covid-19, demand for Zoom videoconferencing software has surged as businesses told employees to work from home. Zoom morphed into a social phenomenon as making video calls became routine for consumers to keep in touch with family and friends. Distance learning as schools re-opened and telemedicine also boosted demand for Zoom Video’s cloud-based services.

ZM stock bulls argue that video calling is here to stay and will play a much larger role in businesses, schools, and everyday lives. Trouble is, Zoom rivals also think it’s a big market opportunity, and they don’t want Zoom to dominate.

In the business market, pre-coronavirus rivals included Cisco Systems (CSCO), Microsoft (MSFT), LogMeIn, and Fuze. Alphabet’s (GOOGL) Google, Facebook (FB), and Verizon Communications (VZ) have pushed into the market, aiming to derail Zoom’s torrid growth. Microsoft Teams collaboration tools have launched free trials targeting Zoom users.

Zoom Stock Fundamental Analysis

Analysts projected Zoom earnings of 79 cents a share on sales of $811.8 million. The company said it had 467,100 business customers, each with more than 10 employees, as of 31st January 2021. That’s up from 433,700 in the October quarter.

For the current quarter ending in April, Zoom forecast revenue of $902.5 million versus analyst estimates of $830 million. Zoom said it expects an adjusted profit of 96 cents at the midpoint of its guidance vs. estimates of 72 cents.

Zoom forecast fiscal 2022 revenue of $3.77 billion. Analysts had estimated revenue growth of 36.5% to $3.53 billion. Zoom Video said it expects adjusted earnings of $3.62 a share at the midpoint of its guidance versus analyst estimates of $2.96.

For customers with one to 10 employees, monthly renewals are expected to slow as the economy reopens and shelter-in-place orders lift. There’s expected to be less turnover of larger customers. While paid consumer subscribers are important, the company’s roots are in the enterprise market. Growth in annual recurring revenue for business customers with contracts topping $100,000 is one metric to monitor.

ZM stock owns an IBD Relative Strength Rating of 71 out of a possible 99. Additionally, Zoom stock holds an Accumulation/Distribution Rating of D. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.

The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral. Meanwhile, Zoom stock has not formed a new base. ZM stock lacks a proper entry point. For technical reasons, ZM stock is not a buy.

Zoom Video is only one of many software growth stocks to monitor as “digital transformation” projects gain traction. In addition, there are many large-cap technology stocks growing at a fast rate.

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