Why Invest in the Zoom Boom? Here Are 6 Top Reasons Why You Should Invest Into Zoom Today!
COVID-19 has forced many people to work from home and rely on Zoom to communicate with business associates. The popular telecommunications service has also been great for socializing with family and friends during the lockdown. In fact, many people had never heard of the service prior to the pandemic. One thing that Zoom has done is drive home the importance and reality of how much of our day-to-day personal and work lives are being moved online. Now, you are probably wondering with the popularity of Zoom, why not invest because the future of telecommunications appears promising?
Zoom Stocks at All-Time High
The stock market has been experiencing a lot of changes and few stocks are doing well. However, Zoom Video Communications (NASDAQ:ZM) has reached an impressive $246.54 as of July 17. Prior to COVID-19, Zoom was a niche business tool that was used for business meetings, classes, and social gatherings. Recently though it has taken centerstage for videoconferencing.
Since the beginning of 2020, the stock has surged and more than tripled even when the rest of the stock market crashed. The communication company expanded from 10 million users in December to over 300 million. Zoom quickly become an essential tool during social distancing. However, as businesses struggle to return to the ‘new normal’ many people have started to worry that maybe they have missed the boat when it comes to investing.
Why Invest in Zoom? Look at the Numbers
When looking at the reasons why you should invest in Zoom, the first thing you are going to want to consider are the numbers and if it is going to be a profitable endeavor.
Prior to the pandemic, Zoom stock was not cheap, but the prices have become even more costly. Currently, Zoom trades at a price-to-sales ratio of 85 which makes it higher than Shopify which has a reputation of being a somewhat spendy Cloud stock. The one thing that has changed about Zoom is that it is no longer a simple curiosity but a necessity. The company has become solidly profitable. They have shown an adjusted operating income of $54.6 million with a free cash flow of $251.7 million which works out to 77 percent of revenue. Undoubtedly, this shows dramatic growth. With Zoom, revenue quickly becomes profit.
- Full-year revenue increases of 187 percent reaching $1.775 billion to $1.8 billion
- Price to sales ratio of 37
- Expected adjusted operating income of $355 million to $380 million
- Adjusted earnings per share reaching $1.21 to $1.29
Have the numbers impressed you yet and made you consider why you need to invest in Zoom?
Daily Usage Numbers Growing
Zoom’s daily usage numbers show no signs of showing. If you invest in this, then you’ll want to ride the telecommunications pony all the way to the finish line. Climbing from 10 million in December up to 200 million in March was impressive but so is Zoom’s response to the growth. Right now, they have added tens of thousands of servers across 17 data centers around the globe. This clearly shows company commitment to the future and growth. Founder and CEO Eric Yaun is focused on making sure the company is ready to meet the influx of users.
More Than Just a ‘For Profit’ Company
Zoom makes its investors proud. They have made a commitment to K to 12 educational programs by offering free basic service. Now, teachers at over 90,000 schools in 20 countries can host video meetings with up to 100 participants and face no time limits on video calls.
Zoom Employees Love Their Jobs
Any company is only as strong as its employees. Luckily, people who work with Zoom report a great deal of satisfaction. On Glassdoor, 96 percent of all Zoom employees recommend the company to their friends and 98 percent highly approve of CEO Eric Yuan.
The Big Names are Signing On
Large businesses are signing on with Zoom.
- Johnson and Johnson (NYSE:JNJ) reports 60,000 users
- HSBC (LSE:HSBA) has 290,000 users
- Veeva (NYSE:VEEV) is using Zoom for its 3,000 employees along with integrated the video chat functions directly into their own software
Zoom is dedicated to meeting the requests of their customers. Last year they developed 300 software enhancements. On April 1, Zoom’s CEO stopped enhancements to focus on the real concerns of its users which are trust, safety, and privacy. Basically, the company listened to its users and stepped up its game to meet those demands which are impressive traits and help to build confidence in investors.
It’s All About Happiness
One thing that really stands out about Zoom is that they have embraced their core tenet which is to focus on delivering true happiness. Whether they are connecting colleagues or friends, Zoom wants its users and investors to feel happy.
- Happy employees
- Happy customers
- Happy investors
David and Tom Gardner of Motley Fool Stock Advisor list Zoom as one of their ten best stocks for investors to buy immediately. It seems like everyone is taking notice of the telecommunications company!
At this point, it feels like very few businesses will come out ahead after the global COVID-19 virus is finally reined in and a vaccine released. The situation has become dire in many regions. However, if there is such a thing as a pandemic superstar that has emerged then Zoom takes that signature role. Its impressive market capitalization of $59 billion and stocks that have already tripled makes the company appear virtually unstoppable from an investment standpoint.
Testimonial about increased profits with Zoom:
With the remote workforce in high gear due to COVID, I made the choice to invest in Zoom because I was convinced that the pandemic wasn’t going to just disappear which meant the need for video conferencing was only going to continue to increase in the near future. I did not invest until after Feb 23, but it has doubled, and I foresee a bright future. Zoom expects its revenue to increase by 300 percent as the year progresses. I feel secure in my choice to invest in Zoom.