Zoom Video Communications Inc [NASDAQ: ZM] the video communication company had its shares triple on Thursday after Wall Street analysts turned a bullish run following the company’s recent updates on its Analyst Day, and a day before on “Zoomtopia.” One of the analysts AllianceBernstein almost had its target price tripled from $228 to a high of $611.
After Bernstein raised its target price to $611, Zoom stock shot up to trade at $527.72, which is about three and a half percent rise. This price is also as a result of the Zoom updates with promises of new product releases. This meteoric rise has occurred just within the pandemic period when people began working at home. Before the pandemic, Zoom shares were at $100. With people working at home, and more users getting into the network, Zoom has transformed from just being a simple video communication company, to a $150-billion company.
Rogers continues to say that with a PE of over 600, and with Zoom price heading to surpass the $600 mark, it is bound to grow even bigger. The company has the potential of becoming the next Facebook, Netflix, or just another big communication company. The potential that this company has is still so huge, and this is the reason why Bernstein is very optimistic.
Dan Roberts has a rather cautious approach to all the noise going around about Zoom being the next big thing. He is quick to point out that the $150 billion cap is not based on actual revenue, but potential value. It is true it has had substantial growth, but it is not the only company providing such services. There are the likes of Google Hangouts and Skype, which has since lost its trail and others. Zoom is becoming a generic name, where users claim to have zoom calls but end up using a different platform altogether. Roberts’ advice is that analysts need to put some brakes on the bullish trends.
Melody Hahm views it differently. She says that Zoom has taken a different approach. While other communication companies like Facebook and Spotify were more of recreation and leisure, Zoom has taken the corporate way, showing businesses and companies that they can have serious connections on this platform. This approach, coupled with the need to work at home during the pandemic, has even changed the narrative of working from home to living at work. It is this new use of Zoom that gives it such potential for growth.