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Zoom Video Communications, perhaps the ultimate corporate poster for Covid-19, has released another successful quarter of financial results.
The video conferencing specialist said its profit for the quarter ending Oct. 31 was 99 cents a share, well ahead of Wall Street analyst consensus expectations of 76 cents. Revenue more than quadrupled to $ 777.2 million, far better than analysts’ forecast of $ 694 million.
Zoom’s shares ended the trading day at $ 478.36, up more than 1%, but then fell 5% after the results were released. The stock has climbed more than 600% in 2020 as the company’s technology has become the bedrock of the pandemic operating environment for businesses, schools and institutions of all stripes.
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The start-up faces a number of established rivals, however. Microsoft, whose Teams offering competes with Zoom, recently dropped the 40-minute time limit for free tier subscribers. Teams also plans to soon allow users to stay connected with up to 300 other participants. Zoom has limited free meetings to 40 minutes for no more than 100 participants.
While the Zoom stock has been an almost constant gain throughout the year, recent news regarding Covid-19 vaccines has rewarded the actions of many traditional elements of the economy. In late October and early November, Zoom shares plunged more than 30% as some investors shifted their bets to more proven companies leading the global economic recovery.
Meta Marshall, an analyst at Morgan Stanley, expressed her point in a note to clients last week that the Zoom stock will have a lot of benefits even after the decline in remote working begins. “While a vaccine changes the outlook for the number of employees who will work from home by the end of 2021, that doesn’t change the fact that in 2020 most employees will stay home (at least for a good part of the week), “she wrote.
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