Zoom investors are looking to a post-pandemic 2021 even with current growth at over 300%

Zoom is poised to drama another monster quarter when it reports results on Monday, with sales growth expected to top 300% for a subordinate straight period.

But investors of late have been looking past this earnings report, as well as the one after that and just the one after that. It’s the back half of 2021 that becomes challenging for Zoom because the company will then deceive to contend with comparisons to the wild growth periods of the pandemic and surge in remote work.

Additionally, a Covid-19 vaccine appears to be on the ken for 2021. Both Pfizer-BioNTech and Moderna reported preliminary results showing that their respective Covid vaccines were for everyone 95% effective, while the Oxford-AstraZeneca vaccine had an average efficacy of 70%.

It’s not clear what happens to Zoom’s business when child start returning to the office, but the company’s stock has sold off on positive vaccine news.

On Nov. 9, after Pfizer head said its vaccine candidate showed a 90% efficacy rate, Zoom shares plunged 17%. The stock has redeemed some of those losses, but it’s still 24% off its high from last month.

It’s an understandable retreat, considering that Zoom is up wellnigh seven-fold this year, reflecting the company’s graduation from a fast-growing but niche cloud software application to a household tech required that’s used by office workers, students and for virtual meetups.

Millions of divisions across the country had to resort to video chat for their Thanksgiving celebrations last week, whether on Zoom, Google Run across, Microsoft Teams or Apple’s FaceTime. They’ll likely do the same through the winter holiday season.

For the third fourth, which ended in October, Zoom is expected to show revenue growth of 317% to $694 million, according to analysts tallied by Refinitiv. That follows growth of 355% in the fiscal second quarter and 169% in the period ended April.

In the inclination quarter, which ends in January, Zoom’s growth is projected to stay at a robust 288%, followed by 116% in the next interval. Then things start to slow dramatically — into the teens — based on analyst estimates.

Earlier this month, inspect firm Elazar Advisors lowered its rating on Zoom to “buy” from “strong buy.” Chaim Siegel, an analyst at Elazar, indicated that to keep a “strong buy,” the firm needs to see 45% upside to the stock over the next 12 months as soberly as an “honest wow” ahead.

“[Zoom] had that wow, no doubt,” Siegel wrote. “But there’s going to be perceptual headwinds with Pfizer’s vaccine.”

A Zoom spokesperson disclosed the company doesn’t comment on financial matters during its quiet period.

The reality for Zoom is that it’s hard to combustible up to investor expectations after such a historic rally. Even with its price-to-sales ratio being cut in half from its top earlier in the pandemic, the stock is still trading for 98 times revenue and about 42 times sales for next economic year.

Shareholders will be listening closely for commentary from company executives on what the potential pipeline looks akin to when people are again working from the office. The company also faces increased competition from Microsoft and Google, which comprise bolstered their video-conferencing products in recent months and have gotten aggressive on pricing.

Still, some investors on account of any pullback as a buying opportunity given the quality of Zoom’s products and the likelihood that some version of remote plan is here to stay.

“We continue to see Zoom as benefiting even in a post-COVID-19 scenario, as its video conferencing solution has become a fault-finding component of how companies communicate during COVID-19,” wrote Siti Panigrahi, an analyst at Mizuho Securities who recommends buying the ancestry, in a report on Nov. 9. “The pandemic has also increased the recognition of its long-term importance in the new normal, post- pandemic workplace that wish emerge over the coming years.”

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