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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 -4.08% ) 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.

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.

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Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
$183.92 (-4.08%) $-7.83
Microsoft Corporation Stock Quote
Microsoft Corporation
$323.01 (-1.97%) $-6.48
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$306.84 (-1.14%) $-3.55

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