Software offerings beyond just conference calls have been faring quite well, with Zoom Rooms and Contact Center seeing solid results. However, Zoom’s “hangover” is likely to pass quicker than most other pandemic winners.

The company is still moving through a “hangover” period due to the 2020 pandemic pull-forward in demand.

In a market where investors care more about profits and margins than sales growth, Zoom was rewarded handsomely for the numbers and its upbeat profitability outlook. Zoom stock’s first quarter saw decent revenues alongside robust profitability numbers. Zoom Stock Zooms Higher Following Solid First Quarter Zoom stock looks too cheap at 26.8 times trailing earnings and 7.7 times sales, given its growth profile and recent resilience. Though the same negative macro factors are still in, like the potential for a recession and the higher-rate environment, I’d argue that Zoom is a firm that’s more than capable of innovating its way through recent storm clouds.įurther, the next recession may be more devastating to consumers than enterprises, making Zoom an intriguing option that may be able to stage a comeback even as everything else folds. The recent quarterly beat confirms that Zoom is still an innovator that may have overshot to the downside. Unlike Peloton ( PTON), Zoom has a growth pathway to move on from the great tech sell-off of 2021-22. While the pandemic pull-forward in demand was remarkable, it’s worth noting that the ongoing digital transformation is a secular trend that will keep the video-conferencing service provider zooming higher when the time comes. Zoom will probably never see another pandemic-era boom again, but that does not mean the growth is gone.

Though it’s impossible to tell if a bottom is in, the recent round of quarterly results is nothing short of encouraging. Shares of Zoom Video Communications ( ZM) have looked to stabilize in the $85-110 range in recent months.

Zoom stock quote