Zoom Video Communications (ZM 0.56%) has been one of the biggest success stories of the past couple of years, as the company's platform was a natural winner when millions of people were forced to transition to remote work. However, in this Fool Live video clip, recorded on Oct. 11, Fool.com contributors Matt Frankel, Jon Quast, and Danny Vena discuss whether Zoom still has upside potential in the years to come.
Matt Frankel: With a stock like that, and I'll tell you why I ranked it No. 6 [out of six stocks our experts recently bought]. You mentioned DocuSign (DOCU 0.21%), and these are in my mind two opposite "end of pandemic" stories. The question I ask is, Was this stock's revenue growth because of the pandemic or because it just does something better whether there's a pandemic or not?
DocuSign makes the contract process easier regardless of whether there's a pandemic. When I'm buying a house, I don't want to drive back and forth to my Realtor's office 50 times to sign addendums and things like that. I want a DocuSign file that will take me two minutes. That's a great example of something that it doesn't matter if there's a pandemic or not, that just does it better. That's going to be sticky business. With Zoom, I'm on the fence. I'm not so sure. They're getting me more convinced with all the reasons you just said, but I'm not quite there yet.
Jon Quast: Yeah, I totally appreciate that. And to your point, DocuSign, this was going to happen whether there was a COVID-19 pandemic or not. It just makes sense to be signing documents digitally. The COVID-19 pandemic necessitated it for a time, but it was going to happen either way. With Zoom, I'd say that they were growing fast before the pandemic with their meetings product, but one thing I would point out is that Zoom Phone and Zoom Rooms, those are physical office products when you think about it. It doesn't make a whole lot of sense to be upgrading those if you don't have workers in the office. That's another reason why I like it right now as we go back to work. Now some of these companies have the incentive to make that upgrade that maybe they didn't have in the past 18 months.
Frankel: Yeah, that's why they say they are getting me closer. Danny, what are your thoughts on Zoom?
Danny Vena: This is a company that as soon as I realized that this was what it was that they did and saw anecdotally just how quickly Zoom was being adopted at the very beginning of the pandemic, I bought shares. I actually had, I think, a starter position maybe before that, but I bought more aggressively after that. I tend to agree with Jon. I think first of all, I don't think companies are going to abandon Zoom now that they understand what the utility of the platform is.
I mean, look at us at The Motley Fool. We started off using it and we're still using it. That's not going anywhere. I think I'd like to see further optionality. I'd like to see what their next big thing is going to be before I add to my position, but this is one that I'm certainly not going to get rid of. This is in my portfolio. It's a solid position, it's a solid winner, and I'm waiting to see what the next phase of their growth is going to be before I add. That's why I rated it where I did. I considered rating it higher, I ended up rating it at a four of the six. It's one of those where I'm definitely keeping my eye on it and I don't think the growth story is anywhere near over.
