The future for Zoom is starting to become hazy. On Tuesday, Zoom recorded an over 11% drop in its shares in premarket trading.
This happened shortly after the video conferencing company gave out signals on a faster-than-expected loss in demand. Eased pandemic restriction further led analysts to question Zoom’s future.
In the beginning period of the pandemic, millions of new users flocked to Zoom and other similar conferencing services such as Cisco, Microsoft’s Teams and Salesforce’s Slack. People had no choice but to utilize such platforms for remote working, studying and even as simple as communicating with friends and family.
The upcoming period, however, offers challenges for such platforms. Zoom might even need to find new avenues for growth. It’s even more important after Zoom’s recent $14.7 billion bets on Five9 back in July to establish its contact centre business.
Noted from Reuters, Analysts predict that Zoom might need a few quarters to retrieve its growth rate.
Through a note, analysts at Daiwa Capital wrote, “There are significant questions outstanding regarding how new customer demand and customer churn rates will stabilize in the core business following the loosening of COVID-19 restrictions,” Reuters quotes.
Worst shares drop in nine months, Future predictions on Zoom remain lukewarm
The forecast for Zoom’s current-quarter revenue ranges between $1.015 billion and $1.020 billion on Monday. This indicates around a 31% rise in comparison to multiple-fold growth rates in 2020.
Refinitiv data further showed that four brokerages have lowered their price targets on Zoom. Piper Sandler, with a price target cut to $369 price target cut, becomes the most bearish firm.
By far, Zoom faced the worst drop in its shares in almost nine months. Noted from Reuters, share for Zoom slipped to $307.5 in premarket trading.
Zoom’s shares started to rise in February. It peaked in October, reaching an all-time high record with $175 billion in valuation.
Unfortunately, the company has not been able to maintain the highs. If current premarket losses prolong, Zoom’s capitalization might lose the early half of its October peak’s worth, Reuters notes.
Read also: Zoom to Acquire Call Center Company, Five9
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