Zoom Stock Isn’t What It Used to Be, What’s Next for It?

There used to be a time in which Zoom Video Communications (NASDAQ:ZM) was trading at a price of $600 per share. That was in the year 2020.

Nowadays, its stock has fallen more than 70% from such heights. Should it be something to get worried about? Is Zoom’s place in the market long gone?

Zoom Was Never Meant to Get This High, but That’s Perfectly Okay

First, there’s something that we’ve got to admit regarding companies like Zoom. They are rarely ever profitable, and even when their finances are strong, this happens to be the case.

So, how was Zoom able to break the mould? Easy, by successfully tapping into new and unprecedented needs brought down by a pandemic. A worldwide pandemic, mind you.

But as things have eased down, so has the demand for Zoom, which means that investors are not so excited about its prospects anymore—leading to the decrease mentioned above in value. However, that is not to say that Zoom has stopped performing well.

From 2020 to 2021, Zoom’s revenue increased by 35%. Not to mention, current predictions tell that an additional 51% increase is to come by the end of 2022. 

Plus, its earnings-per-share ratio is expected to reach the likes of $4.85 around the same time. That would be a 300% increase from the previous year.

In a way, you could say that Zoom stock has not dropped to the ground, and instead, it has reached a point in which it’s finally being priced in fair amounts. Alternatively, you could see this as an opportunity to buy some Zoom stock at bargain prices.