In addition to its international expansion, improving business adoption of its Zoom phone may also be a key catalyst for future growth. As of January 2021, the company had 10,700 Zoom Phone customers with more than ten employees. Risks to its growth include competition from Microsoft Teams and Cisco Webex, where the potential launch of new features and services may remain a threat to the Zoom Video platform.
How to trade Zoom Video earnings
Zoom Video’s forward P / E is currently 84.3, which is a significant premium over the tech sector median of 18.6 and the software and computer services industry of 20.1.
Not listed until 2019, much of its valuation has been largely based on its future growth. Having directly benefited from the boom in videoconferencing induced by Covid-19, investors will be attentive to its post-pandemic growth dynamic as economic activities continue to normalize. Previous positive results have not been able to spur a sustained recovery, indicating that investors remain cautious of its high valuation given the slower growth to be expected.
Currently, the stock has 12 buy recommendations, 14 takes and two sells. The Bloomberg 12-month consensus target price of US $ 422.95 suggests a potential rise of 29.6% from the price of US $ 326.43 at the time of writing.
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The Zoom Video share price has seen a decline in trading volume since the start of the year, apparently losing its appeal as the initial game of Covid-19 with normalization underway. Its stock price has traded broadly in a short-term downtrend, as evidenced by its highs and lows since peaking in October 2020.
That said, a short-term rally in the share price could be supported by a bullish divergence formed on the MACD indicator from its recent price lows. If the price goes up, it may encounter resistance at the support price level turned to resistance of US $ 342, where the price has been rejected three times. If prices fail to reach a higher high, we could potentially see a continuation of its downtrend where prices could revert to its short term support level of US $ 280.