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Why Zoom Stock Jumped Today

By Joe Tenebruso – Jul 20, 2020 at 6:28PM

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The need for videoconferencing is growing ever greater.

What happened

Shares of Zoom Video Communications (ZM -0.69%) climbed 9% on Monday, as COVID-19 case counts surge in the U.S. and around the world.

So what

More than 3.8 million Americans have contracted COVID-19 and over 140,000 have died, according to data compiled by Johns Hopkins University. On a global basis, those figures rise to 14.6 million and 608,000, respectively. With the disease spreading rapidly in many areas, health officials warn that many more people are likely to get sick in the days and months ahead.

A person is pointing to an upwardly sloping digital stock chart.

Zoom Video Communications' stock rose sharply on Monday. Image source: Getty Images.

Even as the U.S. economy attempts to reopen, many businesses are allowing their employees to work from home in order to slow the spread of COVID-19. Additionally, a growing number of schools plan to offer virtual classes in the fall to protect students and their families. As a leading provider of videoconferencing technology, Zoom Video Communications is helping to enable these trends. 

Now what 

After a strong first quarter in which its revenue soared 169% year over year to $328.2 million, Zoom is forecasting robust full-year growth. The company sees its fiscal 2021 revenue rising as much as 189%, to $1.8 billion. Meanwhile, its adjusted earnings per share are projected to more than triple, to $1.29. 

With powerful trends fueling its expansion, Zoom is one of the fastest-growing businesses in the world today, and investors continue to reward it with a higher stock price.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Zoom Video Communications and recommends the following options: short August 2020 $130 calls on Zoom Video Communications. The Motley Fool has a disclosure policy.

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