Please ensure Javascript is enabled for purposes of website accessibility

Coronavirus Fears Flooded Zoom With New Customers, Analyst Says

By James Brumley – Feb 26, 2020 at 5:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Zoom Video Communications has provided homebound workers a way of remaining in touch with employers, other employees.

The continued spread of the coronavirus has proven problematic for many companies, particularly if they rely on China for supplies, customers, or both. Not every name has been disadvantaged by the disease, though. Zoom Video Communications (ZM 2.65%), for example, may have already added more users this year than it did during all of 2019.

That's the conclusion from Bernstein analyst Zane Chrane anyway, who estimates the video conferencing service provider added 2.22 million users in just the first couple of months of 2020 versus the 1.99 million users added over the course of last year. Zoom doesn't offer information regarding the size or habits of its customer base, but if Chrane's assumption of 2.22 million new users is on target, the organization provides video conferencing service for 12.92 million people at least once per month.

Image of laptop screen in a business video conference

Image Source: Getty Images.

One reason more workers may be opting for a video communication service in lieu of face-to-face interaction? Germs.

This year's coronavirus epidemic is not just communicable from one person to another, but has proven to be more contagious than initially expected. China's health minister Ma Xiaowei believes the virus may have also already mutated into a form that's even easier to spread than the disease was at the onset of its outbreak in Wuhan, capital of China's Hubei province. Government officials forced the shutdown of some businesses in China, while others did so voluntarily. Zoom Video Communications' technology provides those displaced employees a means of communicating while they are unable to come into a place of work.

Zoom shares are up 57% since the beginning of 2020, around the time the coronavirus began to spread in earnest.

James Brumley has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zoom Video Communications. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
$75.27 (2.65%) $1.94

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.