Zoom’s Market Value, Stock Price Soar

  • Zoom stocks soared Tuesday to almost $122 billion in market cap.
  • The video conferencing firm is now worth more than well-established automobile and aviation firms.
  • It arrives as the organization turns more of its broad free user base into paying subscriptions.

A report for the second quarter of this year shows that the market value of Zoom, which provides home office and video conferencing, has risen. The company, founded by Chinese-American Eric Yuan, has surpassed established companies such as General Motors and Boeing.

Eric Yuan is a Chinese-American billionaire businessman, and the CEO and founder of Zoom Video Communications, of which he owns 22%.

During the epidemic, the demand for these services around the world has skyrocketed. “Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom’s video-first platform,” Yuan said.

On the morning of September 1, Zoom’s share price on the New York Stock Exchange rose rapidly, and the company’s total market value surpassed General Motors and Boeing.

In the second quarter of this year, Zoom’s stock price rose by 33%, reaching $432.45, with a total market value of nearly $122 billion.

“With ZM now clearly established as the global leader in the video collaboration market, its success paves a more clear path to compete in the enterprise market,” Rosenblatt analysts wrote.

Compared with the same period last year, the company’s revenue has quadrupled, reaching $660 million in the second quarter, far exceeding Wall Street’s expectations. At present, Zoom’s revenue forecast for this fiscal year (until the end of January 2021) is $2.4 billion, which is a substantial increase from the $1.8 billion expected in June this year.

Moreover, when Zoom raised its revenue forecast, it has taken into account that many new customers who started using Zoom products during the peak of the epidemic in the first quarter of this year are likely to not continue to pay.

“The surge in growth has come increasingly from the riskiest customer segment,” J.P.Morgan analyst Sterling Auty said. “Customers with less than 10 employees reached 36 percent of total revenue in the quarter.”

This April 18, 2019, file photo shows a sign for Zoom Video Communications ahead of the company’s Nasdaq IPO in New York.

Zoom adopts a free strategy for individual ordinary users. Enterprise users with more than 10 people need to pay to use it, generally paying annually.

According to data released by Zoom, there are currently 370,200 customers paying annual fees, a sharp increase of 304,000 compared with last year. In addition, companies with less than 10 employees often pay monthly fees.

What to do After the Epidemic?

Zoom is considered to be a company that has benefited a lot during the new coronavirus epidemic. Many companies have promoted home office work, which has caused the demand for remote video conferencing to skyrocket; sports events, religious activities, and school remote teaching have also adopted this software. Many relatives and friends “gathering” also choose to go through Zoom.

During the peak of the global epidemic in April this year, about 300 million video conferences were held on the Zoom platform every day. In December of last year, the total number of Zoom meetings every day was only about 10 million.

With the gradual relaxation of epidemic prevention and control measures, the demand for video conferencing may also decline. In order to maintain a certain growth rate, Zoom has announced the expansion of its telephone business; in the future, users can use the Zoom platform to make video calls, phone calls, and text chat.

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Joyce Davis

My history goes back to 2002 and I  worked as a reporter, interviewer, news editor, copy editor, managing editor, newsletter founder, almanac profiler, and news radio broadcaster.

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