What happened

Shares of Zoom Video Communications (NASDAQ:ZM) fell 29.5% last month, according to data provided by S&P Global Market Intelligence, as investors responded to the company's third-quarter results and processed news about COVID-19 vaccines.

So what 

Zoom has been a tech stock darling over the past year, with its share price skyrocketing 396% in 2020. At the beginning of December, the company released its third-quarter results, which boasted a sales increase of 367% year over year and a net addition of 63,500 new business customers. 

A red line graph pointing down.

Image source: Getty Images.

Those were very impressive results, of course, which were fueled by lockdowns and social distancing, but some investors were concerned that the company estimated that 2021 revenue growth would be slower than it was in 2020. As a result, some investors sold their shares after the third-quarter report was released. 

Zoom's stock took another hit toward the end of December, seemingly on no company-specific news. But investors may have been responding to news the COVID-19 vaccines were beginning to be distributed in the United States. Vaccines could eventually bring an end to the pandemic, which in turn could significantly reduce the demand for Zoom's video services. 

It's also possible that some investors were simply taking some of their gains from Zoom's impressive 2020 run-up as they look for other stocks to invest in for 2021

Now what 

Zoom investors are likely trying to figure out whether not this company is still worth holding onto in 2021, and potential investors are trying to decide if Zoom is still a buy. While I don't have a crystal ball, I think Zoom is likely to continue seeing significant growth as the pandemic continues to force countries into lockdowns. Additionally, a slower-than-estimated rollout of vaccines in the U.S. and in Europe could translate into continued social distancing far into 2021. That being said, it's unlikely that the company will replicate the same break-neck growth it experienced in 2020.

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.