Zoom: Video stock undervalued, profit increases by 194%

Last Updated: 16. Januar 2024By

Do you remember Zoom? The US company was one of the big winners at the beginning of the Corona pandemic. The stock rose from just $70 to $568 in 2020. Now, the stock price is at the same level as in 2020. If you did not sell in time, you are either sitting at a loss or breaking even. Is a trend reversal now emerging that investors can benefit from?

Strong increase in profit by 194% For the 3rd quarter, the company reported a revenue of $1.14 billion compared to $1.10 billion in the previous year. Net profit amounted to $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 analysts‘ 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 predict slight growth.

Zoom stops sharp downward trend Conclusion: As you can see from the chart, the stock has now stopped the sharp downward trend. Analysts are not very enthusiastic. 10 out of 34 analysts recommend buying and 23 want to hold, with only one analyst suggesting a sell. The average analyst price target is $80, which does not offer much 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 earnings forecast for 2024, Zoom is not highly valued.