Why I sold Zoom | Zoom Stock (ZM) Analysis after Q1 2022 Earnings Report
Zoom's (ZM) stock was one of the best performing stocks of 2020, but with their first earnings released for Q1 2022, it may be time to reevaluate my investment in the company. In this video I will analyze Zoom's history as a company, talk about what new products they are launching to try to keep growing, and finally go through the earnings they recently announced.
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Zoom was absolute powerhouse of a company in 2020, growing revenue over 360% year over year. They did this through a combination of having the best video conferencing product available, executing well to scale their company in the face of increasing demand, and achieving a one-in-a-lifetime brand position by being the go-to platform for staying connected while working from home. This incredible growth resulted in a similar growth in the stock price, which increased 2.5Xs in a matter of months. But in their latest earnings Zoom has shown their growth slowing dramatically, going from a peak of increasing revenue 102% QoQ to 8% in their latest quarter. To me this represents a fundamental shift in the company thesis, going from a hypergrowth company to a more standard SaaS company.
I ended up selling Zoom because this is not the same thesis I was originally investing with, but as I watch Zoom over the next few quarters, it is entirely possible I will re-buy into the stock if I see growth re-accelerate. For now I would rather have my money deployed into faster growing companies that still have large TAMs ahead of them.
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I am not a financial or investment advisor. Everything in this video is for entertainment purposes only. Links above include affiliate commission or referrals, and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.