Zoom Video Communications' (NASDAQ:ZM) stock more than doubled this year as the COVID-19 crisis sent millions of new users to its video conferencing platform. Zoom's revenue surged 88% in fiscal 2020, its adjusted net income rose more than six-fold, and it surpassed 300 million daily active meeting participants in late April.

Those numbers dazzled the bulls, but the bears claim Zoom still has a narrow moat, that it's struggling with security and privacy issues, and its stock is overvalued. Can Zoom overcome its growing pains and justify its premium valuation over the next five years? Or will the stock fizzle out as stay-at-home measures end and more alternatives enter the market?

A woman takes a video call on Zoom.

Image source: Zoom.

What do the bulls think about Zoom?

Zoom was founded nine years ago, but it gained more mainstream attention after it went public last March and the COVID-19 crisis lit a fire under its business.

Zoom has a first mover's advantage in the market, and its number of large customers -- which generated over $100,000 in annual revenues -- rose 86% year-over-year last quarter. That growth in the enterprise market could widen its moat against rivals like Cisco's (NASDAQ:CSCO) Webex, Facebook's (NASDAQ:FB) Messenger Rooms, and Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Meet -- which are all tethered to bigger ecosystems.

Zoom struggled with numerous security issues over the past few months, but it's trying to resolve those issues by hiring dozens of security consultants, using cybersecurity services from Crowdstrike, and DarkTower, and beefing up its infrastructure via a new cloud deal with Oracle.

Zoom's growth is decelerating, but it still expects its revenue to rise 63%-65% annually in the first quarter. Analysts expect its revenue and adjusted earnings to rise 50% and 23%, respectively, this year -- which makes it one of the highest-growth tech stocks on the market today. But unlike many other high-growth stocks, Zoom is also profitable by both GAAP and non-GAAP measures.

Zoom's resilience throughout the crisis could keep the bulls glued to the stock, and it could continue to grow with the broader video conferencing market -- which Grand View Research expects to grow at a compound annual growth rate of 9.9% between 2020 to 2027. In other words, there could be plenty of room for Zoom and its rivals to grow without trampling each other.

A man uses Zoom's video conferencing software.

Image source: Zoom.

Zoom has an enterprise value of about $37 billion, but its brand recognition and growing user base could still make it a lucrative takeover target for tech giants like Cisco, Facebook, and Google.

What do the bears think about Zoom?

The biggest issue with Zoom is its valuation. It currently trades at over 320 times forward earnings and about 45 times this year's revenue estimate. Those "cult stock" valuations are too high relative to Zoom's growth, and could deflate if its growth decelerates, it loses users to rival platforms, or it stumbles over new security and privacy issues.

Zoom's second major issue is trust. It falsely claimed its platform offered end-to-end encryption, which wasn't true because its own employees could still access the video streams. It also quietly revised its "daily active user" count to "daily active participants," since the former metric actually counted the same users multiple times. Those missteps raise troubling questions about the way Zoom markets itself to consumers and investors.

Zoom's security flaws -- which include routing streams through Chinese servers, failing to block attacks on video conferences, and phishing scams -- have already tarnished its brand. Several countries -- including the U.S., Germany, Australia, and Taiwan -- have all asked their government agencies to stop using Zoom. Big companies like Google and Space X have also ordered their employees to stop using Zoom. That list will inevitably grow longer if Zoom can't fix its flaws.

Looking further ahead, Zoom's user growth could decelerate as the pandemic passes and its bigger rivals expand their competing platforms. Therefore, Wall Street's projections for 34% revenue growth next year could be too high -- and the stock could crumble under the weight of its hefty valuations.

So where will Zoom be in five years?

Zoom might seem like a safe haven in a scary market right now, but it's overbought and overrated. Therefore, Zoom might rally higher in the short-term, but I don't think it will significantly outperform its industry peers or the broader market by 2025.

Instead, its bubble could pop and the stock's valuations could cool off to more reasonable levels. If that happens, I might revisit this cult stock to see if it's a worthy long-term investment.