Zoom: Profit Increases by 194%. Stock Undervalued

Last Updated: 12. Dezember 2023By

Do you remember Zoom? The US company was one of the big winners at the beginning of the Corona pandemic. The share price rose in 2020 from nearly $70 to $568. In the meantime, the share price is back at the level of 2020. Those who did not sell in time are now sitting on a loss or are at plusminuszero. Is a trend reversal now emerging from which you can profit as an investor?

Profit increases by a strong 194% For the 3rd quarter, the company reported a revenue of $1.14 billion compared to $1.10 billion the year before. Net income was $141.21 million compared to $48.35 million in the previous year. Earnings per share were $0.47 compared to $0.16 a year ago.

Zoom beats expectations With the figures reported for the 3rd quarter, Zoom has exceeded analyst expectations. For the 4th quarter, the company expects total revenue between $1.125 billion and $1.130 billion and revenue at constant exchange rates between $1.12 billion and $1.13 billion.

Only slight growth in 2024 Zoom now expects earnings per share of $4.93 to $4.95 for the fiscal year 2024 with revenue between $4.506 billion and $4.511 billion. Previously, the company had expected earnings per share of $4.63 to $4.67 and revenue between $4.49 billion and $4.5 billion. The forecasts therefore only foresee slight growth.

Zoom stops sharp downtrend Conclusion: As you can see from the chart, the share price has now stopped the sharp downward trend. There is no real euphoria among analysts. 10 out of 334 analysts recommend buying and 24 recommend holding. The average analyst target price is $80, offering little potential for investors. Some analysts believe $105 is possible – far from the pandemic high of over $560. However, with a P/E ratio of 14 based on the 2024 earnings estimates, Zoom is not highly valued.