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Zoom: emotions will fade away, prospects will remain
The Zoom company, which promotes the priority program of the same name for videoconferencing, does not need a special introduction.
So, what can be seen from the recent quarterly report that made so much noise:
The most unpleasant thing that the capital markets reacted to is the issuer’s forecasts for the fiscal year 2023. The company lowered revenue expectations to $4.38-4.39 billion against $4.5-4.6 billion. Forecasts for net adjusted earnings were in the range of $3.70-3.77 per security, with an earlier expectation of $3.80 per share.
A strong dollar is a serious factor of pressure on the company. In addition, Zoom notes an increase in the activity of competitors (Teams, Weber) and predicts a structural slowdown in the market as a whole.
Users resort to Zoom functionality less – the excitement during quarantine has exhausted itself.
But there is also good news:
In general, we can say that Zoom, of course, is experiencing negative pressure from the competitive environment – but it definitely does not seek to be an outsider.
The local failure of the shares by 15% after the release of the reports is attributed to the emotional reactions of the “thin” market.
The strategic goal of returning to $140 is still on pause, but it will be updated as soon as the degree of emotions decreases.