Since the COVID-19 pandemic began, investors in coronavirus treatment and coronavirus vaccine stocks have generally seen their holdings rally, if not spike. After all, the deadly virus has taken countless lives worldwide and unleashed havoc on world economies, putting all eyes on companies that could be the first to find a cure. 

One aspect of the coronavirus that investors sometimes overlook, however, is how companies are adjusting to its long-term societal impacts. Zoom Video Communications (NASDAQ:ZM) has been one of the leading players in the video-conferencing sector, servicing a growing market for people working at home. Should investors capitalize on the company's success?

Professionals greeting through a conference call.

Image Source: Getty Images.

What's the logic behind buying Zoom? 

In April 2020, Zoom had as many as 300 million (free and paid) participants per day using its teleconferencing platform. That is a 30-fold increase from the 10 million daily participants Zoom had just four months earlier, in December 2019. Simultaneously, the number of annualized meeting minutes increased 20-fold from 100 billion in January 2020 to 2 trillion in April 2020.

The company was able to monetize its surging usage levels. In the first quarter of 2021, Zoom's revenue increased by 169% year over year to $328 million, while the number of new business signups increased by 354%, or 206,000 more than last year. 

Even as governments around the world reopen, the company is still seeing elevated numbers of participants on its platform. For the entirety of its 2021 fiscal year, Zoom anticipates it will generate up to $1.8 billion in revenue and $0.46 in earnings per share, representing at least triple-digit growth over last year.

What about the risks involved?

Even though Zoom's underlying business is on a winning streak, critics say that COVID-19 will become nothing more than a fading stimulus to its revenue and bottom line. Once the pandemic subsides and everyone goes back to work in their offices, skeptics argue, then demand for Zoom's video-conferencing service will plummet. This thesis, however, overlooks a key benefit of working at home -- economic savings. 

Companies in specific sectors are discovering that employees working at home are showing the same level of productivity, thus saving ample business-related travel time and expenses. In fact, major tech companies such as Square (NYSE:SQ) and Twitter (NYSE:TWTR) are giving employees the option to work at home indefinitely.

Hence, it is likely the practice will establish itself into a trend, even if there is a cure or a vaccine for COVID-19. Indeed, based on internal consumer billings information, Keybanc analyst Alex Kurtz projects a 32% quarter-over-quarter growth in Q2 2021 from Q1 2021 on the number of new accounts opened at Zoom, compared to a consensus estimate of a 15% decline. That is remarkable, considering the company's Q2 2021 operating period was when states began lifting their quarantine and lockdown restrictions, and the economy began to return to normal.

Takeaways for investors  

Besides seeing record levels of growth, Zoom also has over $1.1 billion in cash and investments on its balance sheet, with no debt whatsoever. Year to date, its share price change is 291.3% as of Aug. 17. A $10,000 investment in January would now be worth $39,130, in the span of eight months. 

Although the stock is not cheap, paying a premium for a stock that has witnessed a revenue growth rate of near 200% is justified. Investors should keep a lookout for the company's next growth catalyst, its Q2 2021 earnings call at the end of this month. If Kurtz's estimates are accurate and the company is, in fact, seeing tailwinds to customer growth, then Zoom would be a fantastic long-term buy as the world switches to a new work model in the aftermath of the coronavirus. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.