2024-03-11 02:59:00 ET
Shares of Zoom Video Communications (NASDAQ: ZM) are down 10% over the last 12 months because investors believe that the days of growth for video calls are over. And there's certainly some truth to that sentiment.
At the end of January, the company had 220,000 enterprise customers, which looks impressive. However, that's only 4% more than a year ago. Moreover, the numbers suggest a drop in revenue from customers who are just regular people, not businesses. Given these slow growth numbers, video-calling software doesn't seem to be a high-growth opportunity.
On one hand, Zoom's results are commendable. From the start of 2020 to the end of 2021, the company's trailing-12-month revenue was up more than 500%. The company has held on to this growth without taking a step backward. On the other hand, the lack of growth now suggests that the upside from video communications hit a ceiling during the pandemic.
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