andresr/E+ via Getty Images Investment Thesis Since my last coverage on Zoom Video Communications (NASDAQ: ZM ) in June, the company’s share price has fallen over 28% and is now trading near its 52-week low. While I certainly do not think ARK Innovation ETF ( ARKK ) target price of $1,500 is viable, the company does look pretty de-risked right now. The hype for Zoom has died down but its products are still used by some of the largest companies in the world. The company changed its strategy and shifted its focus to enterprise, which should drive growth and improve retention rates. Despite tough headwinds, it is still growing revenue and continues to be very profitable. The current valuation is attractive with multiples extremely compressed. A lot of pessimism is likely priced in already and should offer some downside protection. If the shift to enterprise customers is successful and growth reaccelerates, there should be meaningful potential upsides. Therefore I rate the company as a buy. Data by YCharts The Shift To Enterprise The pandemic is behind us but hybrid work is likely to stay, as it is much more flexible and cost-effective for both employers and employees. According to […]
Zoom Video Communications: A De-Risked Opportunity
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