The COVID-19 epidemic sent more than 40% shares in one session and, amid continued success, Zoom Video Communications Inc. achieved a $ 100 billion market cap for the first time on Tuesday.
Zoom ZM shares,
40.8% higher on Tuesday, easily the strongest one-day performance for the stock since it joined the public markets in April 2019. Zoom topped a market capitalization of $ 100 billion for the first time before the season ended at $ 129.1 billion, thanks to its total of $ 37.4 billion – roughly equal to eBay Inc.’s EBAY.
And Slack Work Technologies Inc.,
For more: You can use Zoom for free, but companies are paying for it and pushing the stock to new heights
Analysts discussed a “truly impressive and in some ways unprecedented quarter” with JPMorgan’s Sterling Autie and FBN Securities analyst Shebly Serafi’s “really explosive growth.”
Serfi called Zoom “the pre-eminent financial beneficiary of the COVID-19 crisis” and said he looked up to fiscal third-quarter and full-year projections.
“For example, the company is guiding for ~ 3% quarter-on-quarter revenue growth in the current FQ3 quarter, but we estimate that the average number of customers with more than 10 employees will grow by 18% Q / Q, ” She wrote. “If we assume that customers with 10 or fewer employees grow by 5% Q / Q, and if we model that the number of customers with more than 10 employees increases by 2% Q / Q, then the guidance fit For customers with an average of more than 10 employees to do, there will be a 13% Q / Q reduction in revenue per user. ”
This decline seems unlikely in his view, given that Zoom’s average revenue per user for this base of customers generally does not decline in the fiscal third quarter considering Seraphy. “Therefore, if prior ARPU trends continue, we may have 15% revenue relative to our model, which uses the company’s guidance,” he concluded.
Seraphy has a better rating on the stock and raised their price target from $ 250 to $ 525.
The July numbers left Bank of America’s Nikolay Beliove feeling excited about the long-term prospect for Zoom’s business, even after the epidemic.
“The results confirm our view that Zoom is both a ‘vaccine’ and a ‘vitamin’ … because COVID-19 has permanently moved the world into a hybrid-work environment and clearly cloud communication and videoconferencing Has raised awareness about, ”he wrote. “It gives us confidence that these results are not just a bridge forward for business, but are sustainable and sustainable trends.”
Beliov has a buy rating on the stock and has raised its price objective from $ 260 to $ 475.
Full Earnings Coverage: Zoom earned as much money in three months as it did in 2019.
Richard Valera of Needham argued that the company has the opportunity to double its revenue once again over the next three to four years.
“While Zoom’s massive user growth has skewed its base towards higher
JPMorgan’s Auto said other metrics beyond Zoom’s 355% revenue growth were also notable. “It’s a 41.7% operating margin and a $ 373.4 million quarterly free cash flow that stands out for us, especially when we consider the magnitude of customers who are paying monthly and not annual in advance like some software companies rely on. She does. ” He maintained more weight and raised his price target from $ 220 to $ 425.
According to FactSet, at least 13 analysts raised their targets after the report. Of the 32 analysts tracked by the service covering Zoom, 15 have Buy ratings, 14 have Buy ratings, and three have Sales ratings. The average target is now $ 379.78.
The stock has gained 573% so far this year as the S&P 500 SPX,
Has gained 8.6%.