Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Can Zoom Video Stock Reach $600 Again?

By (Haris Anwar/ MarketsJun 14, 2021 03:25
Can Zoom Video Stock Reach $600 Again?
By (Haris Anwar/   |  Jun 14, 2021 03:25
Saved. See Saved Items.
This article has already been saved in your Saved Items

Zoom Video Communications (NASDAQ:ZM) has had an incredible run during the pandemic. Demand for the company's digital communications tools boomed amid the COVID-19 blight when millions of workers and students flocked to its video-conferencing service in a global work-from-home environment.

But as economies globally reopen, and vaccinations pick up, many investors believe the best days for Zoom sales are behind us and that going forward, it will revert to business-as-usual. 

Zoom shares, which hit their all-time high of $588.84 in October last year, are down about 40% from their peak. They closed on Friday at $366.40, up more than 5%.

Zoom Weekly TTM
Zoom Weekly TTM

The company’s latest earnings, released early this month, however, show that the San Jose, California-based Zoom has yet not lost its growth momentum. The company gave a sales forecast for the current quarter that topped analysts’ estimates, signaling the company’s ability to retain and add large customers, even as intense demand created by the pandemic eases.

Revenue in the period ending July will climb up to $990 million, topping the $942 million that analysts had projected. Profit, excluding certain items, will be $1.14 to $1.15 a share. Analysts estimated $0.94.

Hybrid Work Environment 

Facing an imminent slowdown once COVID is contained, Chief Executive Officer Eric Yuan is trying to diversify Zoom’s offerings. He has been adding premium products, such as a cloud-based phone system, to appeal to larger corporations, as well as small and mid-sized businesses.

“We are energized to help lead the evolution to hybrid work that allows greater flexibility, productivity, and happiness to both in-person and virtual connections,” Yuan said in the statement.

Some analysts agree with this approach and see a bright future for Zoom, which became a household phenomenon during the pandemic. RBC analyst Rishi Jaluria, while initiating the coverage of Zoom with an outperform rating, said in a note last week that sales will be robust, helped by large business clients. 

In the note, Jaluria stated:  

“The future of work will likely be hybrid and we believe Zoom will be a critical component to enabling that future. We would argue that hybrid and distributed work is a tougher problem to solve than all employees working remote, as meetings will happen across devices (e.g. laptops, mobile phones, hardware meeting rooms).” 

RBC set a price target of $450 per share for Zoom, which is nearly 30% above where the stock closed on Friday. The note adds:

“While we are not dismissive of competition, especially from giants like Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL), we view Zoom’s video conferencing as being meaningfully differentiated on its reliability, scalability, and ease-of-use. We believe this and the critical nature of video conferencing will be enough to hold off ‘good enough’ competition, particularly from Microsoft Teams.”

Bank of America is another investment bank bullish on Zoom’s post pandemic prospects. In a recent research note, the bank said the company’s stock could soar again this year and erase much of its slide in recent months. 

“In our view, Zoom’s superior video experience has solidified its position as the go-to meetings platform post-COVID. As the pandemic lingers and enterprises adopt more flexible workforces, we believe 2021 will be another good year for Zoom,” the note said. Bank of America has a $480 price target for Zoom.  

Bottom Line

The majority of analysts don’t see Zoom stock going back to its all-time high anytime soon as the pandemic-fueled use of conferencing tools slows down. But there is near consensus that the company has a bright future in the post-COVID world, making its stock a suitable candidate to buy and hold.

Can Zoom Video Stock Reach $600 Again?

Related Articles

Can Zoom Video Stock Reach $600 Again?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email