Is Zoom Video Communications Over Valued ?
Actualizado
Zoom's stock surged nearly 300% this year as the COVID-19 crisis turned its video conferencing platform into a household name. Its revenue rose 88% in fiscal 2020, which ended this January, as its adjusted net income soared 514%.
That dazzling growth continued in the first quarter, as its revenue and adjusted earnings surged 169% and 555%, respectively, throughout the start of the pandemic. Its number of customers contributing over $100,000 in revenue over the past 12 months also jumped 90% year-over-year.
Zoom expects its full-year revenue to rise 185%-189%, and for its adjusted EPS to soar another 246%-269%. But looking further ahead, analysts expect a significant slowdown, with 25% revenue growth and 19% earnings growth next year.
We should always be skeptical of analysts' long-term forecasts, but two factors could cause that slowdown. First, rival platforms -- including Cisco's Webex, Facebook's Messenger Rooms, and Alphabet's Google Meet -- could lure away its users. Second, the COVID-19 growth spurt was likely temporarily, and should fade after the pandemic passes. Those challenges make it tough to justify buying Zoom's stock at about 200 times forward earnings and nearly 40 times this year's sales.
That dazzling growth continued in the first quarter, as its revenue and adjusted earnings surged 169% and 555%, respectively, throughout the start of the pandemic. Its number of customers contributing over $100,000 in revenue over the past 12 months also jumped 90% year-over-year.
Zoom expects its full-year revenue to rise 185%-189%, and for its adjusted EPS to soar another 246%-269%. But looking further ahead, analysts expect a significant slowdown, with 25% revenue growth and 19% earnings growth next year.
We should always be skeptical of analysts' long-term forecasts, but two factors could cause that slowdown. First, rival platforms -- including Cisco's Webex, Facebook's Messenger Rooms, and Alphabet's Google Meet -- could lure away its users. Second, the COVID-19 growth spurt was likely temporarily, and should fade after the pandemic passes. Those challenges make it tough to justify buying Zoom's stock at about 200 times forward earnings and nearly 40 times this year's sales.
Nota
Another short is forming on lower time frame 
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