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Is This an Overreaction to Zoom's Earnings?

By Jose Najarro – Nov 25, 2021 at 7:00AM

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Not even double-digit revenue growth can save Zoom's stock price.

Today's video focuses on Zoom (ZM 3.59%) and its earnings report, released on Nov. 22 after the market closed. Here are some highlights from the video.

  1. Zoom reported $1.05 billion in revenue up 35% year over year (YoY) and up 3% quarter over quarter. Revenue growth was driven by triple-digit growth in its Zoom Phone, an 18% YoY increase in customers with over 10 employees, and a 94% YoY rise in customers providing over $100,000 of revenue in the trailing 12 months. 
  2. Management did state that Zoom has increased costs in research and development and sales and marketing. As competition in the video conference market continues to grow, Zoom wants to keep innovating to ensure its products are the best in the market and have a strong sales team to continue its growth domestically and internationally. 
  3. Numerous analysts have decreased their price target for Zoom after the company reported earnings. The bearish sentiment from analysts and the current market sell-off are creating huge volatility in Zoom's stock price. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the midday prices of Nov. 23, 2021. The video was published on Nov. 23, 2021.



Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Jose Najarro owns shares of Meta Platforms, Inc., Microsoft, and Zoom Video Communications. The Motley Fool owns shares of and recommends Meta Platforms, Inc., Microsoft, 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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