Asianet NewsableAsianet Newsable

'Faster-than-expected': Zoom shares tumble 17 per cent as people return to office

On Tuesday, the company's stock dropped by the highest in more than nine months, closing at $289.50.

Zoom shares tumbles 17 per cent as people return to office gcw
New Delhi, First Published Sep 1, 2021, 1:51 PM IST
  • Facebook
  • Twitter
  • Whatsapp

Zoom Video Communications Inc shares fell almost 17% on Tuesday after the video conferencing business reported a faster-than-expected decrease in demand. Analysts questioned the company's plans when people return to work. As the epidemic drove individuals to work, study, and interact with friends and family remotely, Zoom and other video conferencing platforms such as Cisco, Microsoft's Teams, and Salesforce's Slack gained millions of new customers.

Zoom will need to find new development channels when pandemic restrictions are lifted. In July, the firm made a $14.7 billion stake on Five9 to boost its contact centre operations. Analysts predicted that Zoom would take many quarters to recover to its real underlying growth rate.

Also Read | Zoom launches new Focus Mode for educators to keep students more attentive in class

"Considerable uncertainties are remaining over how new customer demand and customer churn rates will stabilise in the core business following the relaxation of COVID-19 limitations," Daiwa Capital analysts stated in a report. Zoom predicted current-quarter sales between $1.015 billion and $1.020 billion on Monday, implying a 31 per cent increase compared to multiple-fold growth expectations in 2020.

According to Refinitiv data, at least six brokerages reduced their price goals on Zoom, with Piper Sandler being the most pessimistic, reducing its price objective by more than $100 to $369. On Tuesday, the company's stock dropped by the highest in more than nine months, closing at $289.50. Since February of last year, its shares have risen to stratospheric highs, with its valuation reaching $175 billion in October. Since then, the stakes have fallen in value, and Zoom's current market valuation is half of it in October.

Also Read | JioMeet adds support for Hindi, Marathi, Gujarati; more languages to be launched soon

Follow Us:
Download App:
  • android
  • ios