Zoom: Video stock undervalued, profit increases by 194%

Last Updated: 8. Februar 2024By

Do you remember Zoom? The US company was one of the big winners at the beginning of the Corona pandemic. The stock price rose from just $70 to $568 in 2020. Now the stock price is back at 2020 levels. If you didn’t sell in time, you are either sitting at a loss or breaking even. Is a turnaround on the horizon that investors can profit from?

Profit increases by a strong 194% For the last quarter, the company reported revenue of $1.14 billion compared to $1.10 billion in the previous year. Net profit 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 exceeds expectations With the numbers 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 of $4.506 to $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 downward trend Conclusion: As you can see from the chart, the stock has now stopped the sharp downward trend, but it does not yet appear to be on a rebound. Even among analysts, there is no real euphoria. 10 out of 34 analysts recommend buying, 22 recommend holding, and only 2 analysts think selling is a better option. The average analyst price target is $80, leaving 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 12.8 based on the profit estimate for 2024, Zoom is not highly valued.