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My Thoughts on Zoom's Earnings -- Are People Overreacting?

By Jose Najarro – Sep 2, 2021 at 10:30AM

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Zoom's stock price fell by double digits after its earnings report. Is it a buying opportunity?

Today's video focuses on Zoom's (ZM -1.02%) recent stock price movement after the company announced its earnings on Aug. 30, 2021, after the stock market closed. Investors did not seem pleased with the quarter, and Zoom's stock price dropped over 10% in one day. Here are some highlights from the video: 

  1. After the earnings call, numerous analysts cut Zoom's stock price target, bringing high bearish sentiment toward the company. To add to that bearish sentiment, the Federal Communications Commission reported that it requires further analysis on the acquisition transaction of Zoom and Five9 (FIVN 2.58%)
  2. For the quarter, the company grew revenue by 54% year over year. Zoom is still a high-growth company, but it seems that quarters of triple-digit YOY revenue growth are not likely in the near future, which may have some growth investors looking for the next big growth story elsewhere.
  3. Earnings seem to be strong regardless of the price action. Customers with over $1 million in annual recurring revenue grew by 77% YOY, reaching a total of 156 customers. Customers with over $100,000 in ARR from Zoom's phone-related products grew by 241% YOY. Zoom's phone seems to be the new growth story for the company. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the premarket prices of Aug. 31, 2021. The video was published on Aug. 31, 2021.


Jose Najarro owns shares of Zoom Video Communications. The Motley Fool owns shares of and recommends Five9 and Zoom Video Communications. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

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Stocks Mentioned

Zoom Videommunications Stock Quote
Zoom Videommunications
ZM
$69.85 (-1.02%) $0.72
Five9 Stock Quote
Five9
FIVN
$61.78 (2.58%) $1.55

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