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Zoom Stock Falls as Revenue Growth Continues to Slow | Barron’s

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Relative strength accompanied their recent movements,. Zoom skyrocketed in popularity during the early stages of the pandemic as more people worked remotely from home.

What went wrong for Zoom in Q1? Yahoo Finance. Sign in. Sign in to view your mail. After Hours Volume: Volume: 3. Customize MarketWatch Have Watchlists? Log in to see them here or sign up to get started. Create Account … or Log In. Go to Your Watchlist. No Items in Watchlist There are currently no items in this Watchlist.

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Go to Watchlist. No Recent Tickers Visit a quote page and your recently viewed tickers will be displayed here. Search Tickers. MarketWatch Dow Jones. ET by MarketWatch Automation. ET by Barron’s. Some of these companies include Moderna, Inc. After a careful assessment of the stocks that exploded during the peak of the COVID pandemic, we selected companies that lost the most over the past six months. We have discussed reasons for the companies declining in value as the pandemic eases.

We have ranked the companies according to the hedge fund sentiment around the holdings, which was gauged from the elite funds tracked by Insider Monkey in the fourth quarter of Robinhood Markets, Inc. During the stock market crash, Robinhood Markets, Inc. The company went public on the Nasdaq on July 29, , and the stock plunged The earnings and revenue for the third and fourth quarter of came in below market consensus owing to lighter crypto trading amid the crypto crash of The analyst issued a mid-Q1 outlook for the brokers and asset managers and continues to favor the “rate-sensitive stocks” for at least the next two quarters.

In addition to Moderna, Inc. Caveat emptor… Buyer beware. However, due to a period of heightened volatility post-pandemic, the company declined to announce annual guidance for bookings, revenue, and free cash flow.

In Q4 , Wix. Atlantic Equities analyst Kunaal Malde downgraded Wix. According to the Q4 database of Insider Monkey, 29 hedge funds held long positions in Wix. Steadfast Capital Management is the largest stakeholder of the company, with 1. Here is what Baron Asset Fund has to say about Wix. Novavax, Inc. However, the company is working on creating vaccine variants to fight omicron. On February 28, Novavax, Inc. Riley analyst Mayank Mamtani lowered the price target on Novavax, Inc. A total of 30 hedge funds were bullish on Novavax, Inc.

DraftKings Inc. The stock rose to prominence during the pandemic since people indulged in online betting and fantasy sports when they were forced to stay indoors. However, investors are concerned as DraftKings Inc. The stock declined The stock market is forward looking. It’s clear that investors have been worried about what will happen to Zoom once the pandemic is over, and that worry has contributed to the stock’s decline.

The video-conferencing software market isn’t going away, and the pandemic almost certainly accelerated adoption of the technology. But the end of the pandemic represents a sea change for Zoom. In the first months of the pandemic, businesses that abruptly found themselves with remote employees had no choice but to pay for video-conferencing software. It didn’t matter how much it cost; what mattered was getting up and running quickly. There are plenty of video-conferencing options, but many of them are geared toward larger enterprises or tied to legacy systems.

If a company was already a Cisco customer, using WebEx made sense. For many companies, though, Zoom was the obvious choice. Even though the pandemic isn’t over, the environment today is very different.

Companies that absolutely needed to adopt Zoom’s software have already done so. Some of those companies are starting to bring workers back to the office. While remote work will probably be more prevalent in the post-pandemic world than in the past, plenty of workers will no longer be using Zoom as often. Companies that frantically adopted Zoom last year can now take a breath and decide whether it’s the best solution. The urgency is gone. Zoom is starting to see smaller customers drop off the platform , and enterprise customers are taking more time to make buying decisions.

The bonanza is over.


Why did zoom stock drop so much – none: –


Within the next 15 years, people 65 or older are expected outnumber those under 18, for the first time in U. Although big drops in the stock market can be unnerving and tug on investors’ emotions, they’re also, historically, an excellent time to put your money to work. Corrections and bear markets tend to run their course relatively quickly, and all notable declines throughout history have eventually been erased by a bull market rally.

Meanwhile, the Federal Reserve enters a blackout period before its next policy-setting meeting later this month. From buying groceries to gasoline to automobiles, inflation has hammered Americans’ purchasing power. In fact, the most well-known metric of inflation has soared to a four-decade high. The metaverse offers added opportunities for a variety of tech stocks. Europe, where Tesla has just opened a production site, is an important market for the electric vehicle manufacturer and its CEO.

As the world faces war, an ongoing public health crisis, and social injustice, corporate executives have found themselves facing questions from their own employees about whether or not they plan to take a stand.

Blockbusters have returned to the big screen, helping AMC bounce back from pandemic-forced shutdowns. Dow Futures 32, Nasdaq Futures 12, Russell Futures 1, Crude Oil Gold 1, Silver Vix CMC Crypto FTSE 7, Nikkei 27, Read full article. More content below. Henry Khederian. In this article:. Recommended Stories. Those growth rates eventually slid as the company faced tougher year-ago comparisons, dropping into the double digits in the July quarter.

For the period ended Oct. Analysts said this trend is likely to continue, putting pressure on Zoom to find new revenue streams and growth opportunities. The company “zoomed to scale last year, but post-pandemic growth is a different story,” Deutsche Bank’s Matthew Niknam said in a research note, maintaining a “hold” rating on the company. Looking across estimates, analysts expect Zoom’s year-over-year revenue growth rates to decelerate to Other analysts note, however, that while not matching its meteoric rise during the pandemic, Zoom is not losing any ground and, in fact, continues to grow.

Zoom has been both a beneficiary and a victim of hype ever since it first exploded onto the scene at the dawn of the pandemic in , said Raul Castanon, a senior research analyst covering workforce collaboration and communication platforms at Research.

After Zoom reported earnings after market close Nov. Castanon thinks that the momentum Zoom experienced during the pandemic lit a fire under its larger, deeper-pocketed competitors — including Microsoft Corp. The market is now crowded with very well-established alternatives, and Zoom is feeling the impact.

Zoom reported about , customers with more than 10 employees at the end of the quarter ended Oct. By comparison, the October quarter saw Moving beyond videoconferencing. Although Zoom’s claim to fame was its videoconferencing platform, the company is looking to expand its presence into other businesses as it seeks to reaccelerate growth.

One increasingly lucrative business segment that Zoom is eyeing is contact center software, which uses artificial intelligence to help companies interact with customers.

Zoom now plans to launch its own solution in the space — Zoom Video Engagement Center — in early A spokesperson for the company declined to comment on the new service.


– Why did zoom stock drop so much – none:


The wildly popular video conferencing company has seen some declines lately. How is it responding? The somewhat worrying results of a survey cause an analyst to make a fairly deep cut to his price target on the shares. Powered by. Zoom Video Communications provides a cloud-based communications platform that concentrates on making the video conferencing experience better, including features like online collaborative meetings, voice and chat capabilities, and collaborative file sharing.

Sector: Information Technology Industry: Software. Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Premium Services. Stock Advisor. View Our Services. Our Purpose:.

Latest Stock Picks. Interactive Chart. All Market Moves Podcasts Earnings. Is Zoom Stock a Buy Now? Jeff Santoro Jun 1, Chris Hill Sep 7, You’ve heard this before, Fools, winners keep winning.

Two approaches that make sense in that they smooth out that singular event of trying to pin maybe a bottom so that you can try to sell higher later, it makes it more of a continuum of an investing decision. Ricky Mulvey: You’re never going to completely remove the emotion out of investing. But if you don’t have a disciplined strategy, you have nothing. But it’s still emotionally difficult to look at the drops. One thing that I’ve been doing, especially looking at some of the companies I’ve owned is revisiting my investment thesis.

Why did I buy this company in the first place? Just because it’s emotional to see that red on the brokerage account, does that change why I initially bought it? Actually, I recently did that with Lululemon , which I purchased because I thought it had a strong brand and like a lot of room for international sales growth, looking at some of their numbers, international sales. I looked at that and I thought, if you want to play the fall of the Chinese middle-class game on strong American brands, different luxury brands, this might not be a bad place to do that.

That was the long-term idea I had on that. But I ignored one thing. I know a lot of Fools like the Mirror. Asit Sharma: Hey, Ricky, I love to look into the mirror. I’m a narcissist. Oh, you’re not talking about that mirror? Then recently shareholders essentially asked, how is that doing? How’s people’s narcissism holding up? The answer was not so great. Conceptually, that’s high for me. I’m surprised that many people are getting involved in the Mirror.

I am absolutely shocked offset that people want to stare at themselves the entire time they work out. I understand the post-workout Jim Muir selfies, whatever you want that, but really the entire time you want to see yourself sweat and strain and work online, I don’t know. The competitive advantage wasn’t there for me on that. I liked the international sales growth. Buried in that quarterly report, Lululemon actually confirmed my idea as an investor, what I was really looking for, which was that international growth is still strong.

That’s the bread and butter stuff that I’m trying to focus on as a shareholder. But it’s hard when you see these huge drops in news that affect the share price.

Asit Sharma: Ricky, I like your analysis of this company. I like the reasons that you bought it. I like your working through of your thesis, testing the thesis after an earnings report.

But let’s take a look at your thesis. This is something that’s very persuasive because Lululemon is a brand that has a lot of cachet in places like Asia. The company is one of the few retailers that has a very dominant physical footprint. It’s still growing comparable sales when you combine the physical stores in a post COVID environment with their online e-commerce portion.

The company itself is I think a really fun business proposition in the retail athleisure space. The other thing I’ll note is that it’s hard not to participate in this connected fitness world. You almost have to make these investments whether they become these huge drivers of your outcomes or they enable you to bring in new customers who want to use the technology. You almost have to do this and I don’t blame them too much. Do they overspend?

Probably not over the long term. What we’re looking back at is a longer payback period on the investment but yeah, I think this will work out for them. Ricky Mulvey: I don’t want to sound like an old man yelling at a cloud. Optionality is great but also isn’t there an element where you want those companies to focus on what they’re good at or am I missing the boat and missing the point on connected fitness?

Asit Sharma: Well, we’ll return to this theme later in this show but I think great management teams are teams that will take some risks sometimes. They like to exercise their imaginations. There is that element in this acquisition. Again, million bucks seems like a big investment, but in the context of their balance sheet and their sales, it’s not that huge.

Let’s come back to this point and we talk about a few other companies because you’ve turned a flag up in my mind. Ricky Mulvey: OK. Asit Sharma: Yeah Ricky.

This is not one that I own but how could we not talk about Zoom? It’s the poster child for stocks that had a big pull-through because of COVID and now are in this ambiguous place. I think it’s a fascinating case study for this theme that we’re talking about today. Some investors bought Zoom at its peak in, I think this was October of If you bought at the top, you’re hurting. It’s got to hurt.

That company is now trading at just 33 times its forward sales and it’s trading at just 28 times. Between all these factors, this top-line growth, the figures free cash flow, this huge balance sheet, management simply needs to figure out how to capitalize on its relationships with 2, customers that provide each more than , bucks in annualized recurring revenue while it keeps all those middle-market companies and small businesses in-house.

They’re doing a lot of innovation on this front. They’ve migrated over to this vision of a corporate enterprise sales. They are building up their direct sales team, they also are thinking through what it means to be in a hybrid workspace. Now their investment is geared toward companies having to use their licenses. If you’ve got a Zoom license for a few employees, it doesn’t work.

If your company has 20, employees, you can’t have Zoom licenses for just 2, of those 20, You have to buy it for the whole company.

This is where they’re starting to gain some new momentum in products like the Zoom phone, which is not really a phone, it’s more of a platform that incorporates text messaging, videoconferencing, etc. But I wanted to say something here which hopefully will be helpful to listeners who have stocks that are in this ambiguous space after COVID. One thing you can do to figure out what might happen next is to look at the management team and try to assess what you make of their capabilities.

Here in Zoom’s case, you’re trying to solve for this optimal use of capital and their ability to transform their business momentum which is high right now into something new. Ricky Mulvey: You like the pivoting that Zoom’s management team is doing?

You think they’re doing a good job at seeing where the puck is going on the hybrid work model? Asit Sharma: I think so. I also think that the things we saw in this management team before COVID ever hit are very apparent now.

It’s a deliberate team they execute not trying to race ahead of other companies but to make sure that they don’t slip up. They are building out some infrastructure of their own that will replace all the cloud infrastructure they basically had to place Zoom technology on during COVID. That’s going to help them in the long run with their margins.

But at the same time, they’re not about to drop the ball. What is dropping the ball for Zoom? Well, Ricky, you and I have a meeting tomorrow and millions of people around the globe also have meetings and for some reason it doesn’t work.

It shows you how capable they were at execution beforehand. He is someone who foresaw how clunky videoconferencing was years ago and worked in an extremely innovative way to build a product that saw beautiful uptake when the world changed. I think he can repeat this act. He’s likely not to have such a big innovation in the future but the enhancements to the product which we’ll see in the next few years, I think he is the right person to drive those.

Ricky Mulvey: Speaking of management teams, it’s important to look at because sometimes stocks fall and they don’t come back.

I think poster child of that asset was General Electric. It was the largest company by market cap and then in a sense it’s falling was emotional. People couldn’t believe that this behemoth, this conglomerate, this real symbol of American capitalism fell, and a lot of it was because of financial engineering, a lot of acquisitions that made it bloated and unwieldy to manage. But you can look back at some of the decisions that it’s leadership made that focused more on the financial engineering aspects rather than really growing the company and its capabilities in a coherent way.

Asit Sharma: Yeah. I really agree with your take on what happened with GE. They mistook who their true stakeholders were.

GE became enamored of its ability to produce very predictable profits for the Wall Street analysts who upgraded or downgraded the stock every quarter, forgetting that their true stakeholders were shareholders, were employees. So much of their focus was on the financial aspect of their business rather than key investments into the industrial parts of their business. Also I will say that here we also have to talk about the fact that GE has been a legacy company. Its roots go back decades and they have a significant pension liability on their books which is the result of offering everyone who worked there and attained a certain tenure a pension.

Companies today are not really worked into that system. I think GE doesn’t get enough of a break by many analysts to look back on the fact that over a period of time that they built up these huge pension liabilities and that was also hard for them to get out of. But yes, the world was changing, GE was not innovating among its various businesses. This is a warning sign to investors, isn’t it Ricky? It makes you uncertain with the rate of technological change today.

Hey, what will happen with the stocks that I’m holding? Ricky Mulvey: I think one key metric to look at if you’re wondering what leadership is doing and how is it focusing on the future is research and development spending. I think that’s key to focus in on, is if you’re looking for these great companies for the future. How are they preparing for that in a way that isn’t just essentially appeasing quarterly Wall Street analysts.

Are they doing something meaningful that will affect them years and even possibly decades down the line? The one example we like to talk about a lot at The Motley Fool of stocks falling are the times that Netflix broke. Steve Broido: [Music] September , in a move that left many baffled, the CEO and founder of Netflix, Reed Hastings, announces in a Sunday evening blog post, the bifurcation of the company.

Netflix would become a streaming-only service, while DVD-by-mail would carry on under the name Qwikster, a moniker that is impossible to spell correctly on the first and even the second try. Hastings correctly saw the potential of livestreaming and the eventual decline of the DVD-by-mail business model and started to disconnect the two. We’ve named our DVD service Qwikster. Steve Broido: But to consumers, it meant a price hike and inconveniently separate accounts, but most importantly, what a dumb name?

Qwikster is now split into three new websites, Qwikster, Qwikster, Qwikster. Climbing back up from the hole would take time, but investors who were able to see the truth of Hastings’ long-term vision were duly rewarded. Moral of the story, focus on the long-term vision, there might be stumbles along the way.

This has been another amazing moment in market volatility. Ricky Mulvey: One of the things that we talked about in a previous conversation, Asit was not just the incident itself, not just the Qwikster incident, not just how it fell, but how you viewed leaderships response, what Reed Hastings did after the stock fell and how that compares to a company like Peloton.

Asit Sharma: I think here that Reed Hastings showed what a great leader he was in this event. I’ve heard people knock on Reed Hastings as if he is a little full of himself or may be high on the arrogance scale, I don’t think that’s the case. Every successful CEO gets that at one point or another in their career. But to be able to very quickly pivot to look in the mirror. Asit Sharma: Not the Lululemon’s Mirror, but the real mirror, the mirror that is right in front of you.

I love that he was able to say, “OK, I really messed up here. This is something that is another key element of a great management team. What about humility? What about the ability to be really self-critical to quickly understand that you just goofed? Ricky Mulvey: It’s an interesting balance. Because look, you have a media executive, you have someone running a streaming service already [inaudible] blockbuster.

Yeah, you want that person to have a little bit of swagger, but how much is too much? You find out when they make a big mistake. It’s your point, that incident is something that could have broken the company. If it’s something where you split DVD and streaming services, that’s a problem that exists internally for you to separate things, you don’t make that the customer’s problem, you own that problem. Very quickly that’s something that they responded to in a positive and generative way.

Asit Sharma: So true, and to your point on Peloton, I really feel that we have cues about management teams in many crises that occur. Pretty significant for Peloton, last year, a small child died using their treadmill and the company was very defensive up front about it, Ricky, it took them some time to come back to customers, to their stakeholders, and say, “Look, we’re making changes to this product. Ricky Mulvey: Well, didn’t they also tell their customers they needed to buy this extra subscription that had enhanced safety features?

Asit Sharma: If that was the case, that’s sort of even worse. But you get these chances to evaluate a management team if you’re a long-term holder, and this is the beauty of buy-and-hold investing.

Sometimes you realize that whatever faith you placed in a management team was misplaced and it’s time to get out, and that’s perfectly OK. You could’ve made money in the stock, you could’ve bought Peloton at some point earlier and maybe you’re holding onto a profit.

If you look at that and understand how important it is that people drive the business decisions and people create the value, it’s OK to sell. Buying and holding doesn’t have to be about just making money. Ricky Mulvey: Sometimes management teams’ decisions quickly bring down a stock price, and sometimes it stays down for a very long time. One example of that is Microsoft after the dot-com bubble, it took 16 years for it to fully recover.

One reason was its focus on the future, maybe some mistakes it made with phones. That is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine. I look at that and I say: “Well, I like our strategy. I like it a lot. Ricky Mulvey: It’s easy in retrospect Asit to like say, “Oh, of course, you don’t need a keyboard on a business phone, users don’t need that.

Asit Sharma: Microsoft in Steve Ballmer’s era was really great at one thing: They were great at optimizing results, they were engineers in every discipline that they approached, so they could engineer a great product.

But here, again, going back to Lululemon, we talked about the exercise of imagination. This is what Steve Ballmer liked, was the ability to imagine a different future. Steve Jobs had this in spades, of course. It can make all the difference. Investors have that long drought with Microsoft.

Why would you have stayed invested in Microsoft over that time period?


Why did zoom stock drop so much – none:

May 28,  · Zoom stock formed a cup chart pattern over nearly eight months, hitting a low of on Oct. 23, , down 43% from its all-time high. . Mar 03,  · In this podcast, we try to make sense of past stock drops and pull out the lessons that investors can use today, including: What to look for from company executives as they respond to crises. Nov 09,  · Zoom Video stock fell as names benefitting from people staying at home due to the coronavirus pandemic came under pressure by the vaccine news. Zoom Video closed % lower. Fellow “stay-at-home.

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