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However, investors worry that Zoom stock growth may not be sustainable due to coronavirus vaccine development.
After rallying more than 400% last year Zoom Video Communications Inc (NASDAQ: ZM) stock remains locked in a multi-week correction. Being an enabler of the stay-at-home lifestyle, Zoom stocks are expected to rally further in 2021.
Market data provided by MarketWatch indicates Zoom stocks are up approximately 14% year to date. However, it is worth noting that they remain down over 31% and 5% in the past three months and one month respectively. Zoom stock closed Friday trading at $384.53, 0.34% up. Meanwhile, they were trading around $384.25, down approximately 0.14% after hours.
Zoom Stock and Its Market Performance
Zoom has been cited as a key player in the ongoing market recovery from the coronavirus pandemic. Remote working and learning have been made easier through the Zoom services. Prior research has shown that a significant portion of office workers may never go back to onsite working, thus making Zoom product critical.
However, investors worry that Zoom stock growth may not be sustainable due to coronavirus vaccine development. True to their fears, Zoom stock plunged at the end of last year on news that different vaccines are on the verge of a notable success rate.
The vaccines are expected to bring back normalcy to our lifestyle. However, it may take longer than anticipated because of the huge difference in the global demand and supply of the vaccine. Moreover, the expected coronavirus vaccines are expected to first be given to the elderly, health workers, and people at high risk. As a result, the office working class and students who presumably make the largest of our population will be last on the vaccine queue.
Zoom is expected to continue benefiting from a large customer base in the coming quarters.
With the increased competition from other video conference providers, Zoom has been working to provide extra and catchy services. Furthermore, its future success is not guaranteed thus the urgent need for diversification. Notably, Zoom has a reported market capitalization of $111.96 billion and 203.86 million outstanding shares. The huge cash reserves give Zoom a chance to invest in emerging markets and promising ones for that case. One of the most notable projects that the company has been working on is a web-based email app set to compete with the likes of Gmail and Outlook.
These collective fundamentals put Zoom stock in a position of rebounding strongly and rallying further by the end of the year. Out of the 27 analysts polled by CNN Business, 15 of them gave Zoom stock a “Hold” rating, eight of them gave Zoom stocks a “Buy” rating, with a median 12-month Zoom video stock forecast of $467, or +37 percent relative to the current price.