FACTS

    The coronavirus lockdown has been exceptionally good for one company’s market value: Zoom Video Communications Inc. Currently valued at $122 billion, its market value outranks Boeing, Starbucks, and “General Motors and Ford, combined.” The app has been adopted by thousands of companies as businesses have shifted to work-from-home models amid the pandemic. The app’s value has more than quadrupled since last year, and its customer base has risen from 66,000 users to over 370,000 in that same time period.

    THOUGHTS

    Sterling Auty, an analyst for J.P.Morgan, warns that as lockdown restrictions lift and companies return to the office, the company faces major “risk of a pullback.” Alan Farley, best-selling author of The Master Swing Trader, agrees.

    However, others suspect that due to continued lockdown measures, the company could continue to see similar profit increases well into next year. Many believe that despite the economy reopening, companies will continue to rethink how they run their businesses and may continue an online or hybrid work model. “By all measures, the Zoom boom has a lot further to go,” wrote Bloomberg columnist and analyst Tae Kim.

    Regarding the company’s estimated profits, one analyst noted:

    “Even though they gave very strong guidance for next quarter, it’s possible they’re being conservative if you consider a stay-at-home back-to-school. Zoom is a household word.”

    Chaim Siegel, analyst at Elazar Advisors

    Another article noted, “Zoom has been one of the clearest beneficiaries of the coronavirus pandemic.”

    “I have been doing this for 20 years, and I have never seen a story like this one. And it shows you the power of a really well-run company with a good mission that has exactly the service everyone needs in a crisis.”

    Pat Walravens, Managing Director at JMP Group
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