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Zoom Shares Plunge 90% From Peak As Pandemic Boom Fades - Slashdot
source link: https://news.slashdot.org/story/22/11/22/2157253/zoom-shares-plunge-90-from-peak-as-pandemic-boom-fades
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Zoom Shares Plunge 90% From Peak As Pandemic Boom Fades
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Zoom Shares Plunge 90% From Peak As Pandemic Boom Fades (reuters.com) 8
Posted by BeauHD
on Tuesday November 22, 2022 @09:02PM from the post-COVID-world dept.
Shares of Zoom have tumbled about 90% from their pandemic peak in October 2020 as the former investor darling struggles to adjust to a post-COVID world. Reuters reports: The stock was down nearly 10% on Tuesday after the company cut its annual sales forecast and posted its slowest quarterly growth, prompting at least six brokerages to cut their price targets. The company, which became a household name during lockdowns due to the popularity of its video-conferencing tools, is trying to reinvent itself by focusing on businesses, with products such as cloud-calling service Zoom Phone and conference-hosting offering Zoom Rooms. Analysts, however, say any turnaround in the business is still a few quarters away as growth in its mainstay online unit slows and competition from Microsoft's Teams and Cisco's Webex and Salesforce's Slack gets intense.
"Zoom has a fundamental flaw -- it has needed to spend heavily to keep hold of market share. Spending to cling onto, rather than grow, market share is never a good place to be and was a sign of trouble ahead," Hargreaves Lansdown equity analyst Sophie Lund-Yates said. The company's operating expenses surged 56% in the third quarter as it spent more on product development and marketing. Its adjusted operating margin shrank to 34.6% from 39.1% a year earlier.
"Zoom has a fundamental flaw -- it has needed to spend heavily to keep hold of market share. Spending to cling onto, rather than grow, market share is never a good place to be and was a sign of trouble ahead," Hargreaves Lansdown equity analyst Sophie Lund-Yates said. The company's operating expenses surged 56% in the third quarter as it spent more on product development and marketing. Its adjusted operating margin shrank to 34.6% from 39.1% a year earlier.
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