Please ensure Javascript is enabled for purposes of website accessibility

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

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

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

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.