As Microsoft Battles Zoom Video Communications Inc in Business, Should You Buy or Sell It?
During the coronavirus emergency, people flocked to Zoom Video Communications Inc (NASDAQ: ZM). Zoom stock outperformed the S&P 500 in profits. Can Zoom Video Communications Inc (NASDAQ: ZM) prosper as it focuses on corporate clients? Microsoft Teams for large and small organizations stands in the way. Analyst Meta Marshall said that Microsoft Teams and Zoom compete in the video conferencing business. Zoomtopia could boost Zoom stock. Its Nov. 8-9. Analysts think Zoom Video could launch new products and alter its strategy.
2023 Zoom Video Communications Inc Outlook
Zoom Video reported mixed July-quarter earnings and missed Wall Street expectations due to sluggish consumer and small business sales. Revenue projection for fiscal 2023 is now 7% year-over-year, down from 11%. Zooms cloud-based software facilitates video conversations and chats where customers can share effortlessly. Competition slowed its consumer market expansion, and Zoom fell 57% in 2022 amid Nasdaq volatility. Zoom underperformed the 19%-down S&P 500. Software growth stocks lag. IGV, a software benchmark, will be down 33% in 2022. Augusts software index fell 5%.
Zoom Stock Strength
During Covid-19, Zoom became a social phenomenon as video calling became commonplace for customers. Remote learning and medical demand enhanced Zoom Videos cloud services. K-12 schools lost free Zoom on June 30. UBS said some schools might switch to paid versions. As firms advised staff to work from home, demand for Zoom videoconferencing software rose. As in-person meetings restart and workers return to work, Zoom Video Communications Inc stock (NASDAQ: ZM) revenue growth has halted. As the coronavirus situation subsides, Zoom must maintain small companies and corporate accounts. As the economy rebounds and shelter-in-place requirements are lifted, renewals for small businesses will lag. Larger customers may stay longer.
Five9 Purchase Ends
Zooms business adversaries are RingCentral, Cisco Systems, Google, and others. UBS reports that Zooms commercial pricing is under pressure as competition increases. Greg Tomb will be Zoom Videos president, who was the VP of Sales for Alphabets Google Workspace. Monitor annual recurring revenue growth for commercial clients with contracts over $100,000. Zoom Video and Five9 (FIVN) merged in 2021. Five9 automates call center services via internet chatbots. The all-stock deal was $14.7 billion. The arrangement was canceled on Sept. 30. Zoom Videos goods and services aim to compete in the contact center sector. AI software may be used. Zoom exhibited IQ for Sales at the Work Transformation Summit. The product enhances corporate meetings with conversation intelligence. Zoom purchased Solvvy in May, which employs AI-based customer support capabilities. Zoom invested in Observe.AI, a contact center AI firm.
Customer Retention Key
Zooms freemium business model has successfully offered free video calling. Zoom limits group call size and length. Before Zoom, video services produced choppy visuals and out-of-sync sounds. Zoom Meeting is a cloud-hosted videoconference. Paid Zoom business plans require 10 or 50 seats and cost $15 or $20 per employee. Some new product ventures growth contributions are unclear. Zoom Phone, a 2019 cloud-calling product, allows group calls without video and replaces PBX systems. Zoom unveiled OnZoom during Zoomtopia 2020 and has paid online event platform. Zoom purchased event production tools from Liminal in 2021.
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