At this week's Zoomtopia event, the company spelled out how it plans build on its recent success, unveiling a slew of new products, capabilities, and updates designed to further solidify its customer base.
RBC Capital Markets analyst Rishi Jaluria said the third quarter was better than feared for Zoom Video, including impressive Zoom Phone numbers.
“Customer adds underwhelmed, but conversations about billings growth miss the annual nature of renewals,” Marshal wrote. Opportunities Ahead: Morgan Stanley analyst Meta Marshall said investors shouldn’t overlook Zoom’s powerful combination of opportunity, positioning and valuation. 18% a year ago), driving >10 employee rev up 6% q/q,” Enders wrote. “Enterprise remained strong with $100K revenue up ~65% y/y and $100K customers up 95% y/y (22% of rev vs. KeyBanc analyst Steve Enders said Zoom’s churn was better than feared, and Zoom Phone, Rooms and Webinars are gaining traction. “While we believe Zoom has multiple long-term growth opportunities (Phones, Rooms, Apps, etc.), we also believe the shares could remain under pressure near-term as its online business normalizes and investors realign expectations,” Kidron wrote. Phone Gaining Traction: Oppenheimer analyst Ittai Kidron said Zoom’s growing traction with Zoom Phones and Zoom Rooms was a highlight of the report. “With topline growth still weighed down by weakening trends in the micro segment from pull-forward and temporary pandemic business, we look for a clear line of sight to the growth trough,” Koontz wrote. Needham analyst Ryan Koontz said he will likely stay on the sidelines until Zoom demonstrates a return to mid-single-digit quarter-over-quarter growth. “We expect these headwinds to weigh on results over the next several qtrs, keeping shares range-bound until clearer signs around what's next for ZM post hyper-growth emerge,” Turrin wrote. Wells Fargo analyst Michael Turrin said Zoom’s guidance raises questions about normalized growth rates in 2022 and beyond. “All things considered, we see shares as fairly valued as Zoom is expected to grow at a slower rate than the peer group,” Walravens wrote. Growth Headwinds: JPM analyst Patrick Walravens said Zoom’s communications platform is superb, but growth headwinds and near-term uncertainty create risk for investors. Related Link: Macy's Analysts Break Down Q3 Earnings: 'Potential For New Value Unlocks' Zoom’s guidance implies revenue growth will further slow to just 19%. Analysts had expected EPS of $1.05 and revenue of $1.02 billion. Looking ahead, Zoom guided for fourth quarter EPS of between $1.06 and $1.07 on revenue of between $1.051 billion and $1.053 billion. Zoom reported more than 2,500 customers spending at least $100,000 per year, up 94% from a year ago. While 35% revenue growth is exceptional for most companies, it marked a sharp decline from the 54% growth Zoom reported in the second quarter and the 191.3% growth it reported in the first quarter. Both numbers exceeded consensus analyst estimates of $1.09 and $1.02 billion, respectively. On Monday, Zoom Video reported adjusted third-quarter EPS of $1.11 on revenue of $1.05 billion. Zoom Video Communications Inc (NASDAQ: ZM) shares dropped 17.4% Tuesday after the company reported yet another quarter of falling revenue growth numbers.