So why has the Zoom stock price been falling? A slow down in growth emergesĪs the vaccine rollout progresses, the Zoom stock price starts to dwindle. Needless to say, this is quite promising. Overall, this led to an $82m increase in free cash flow. And consequently are ramping up their spending. To me, this indicates that existing customers are clearly seeing value in the platform. However, what I find particularly promising is the 131% growth in customers generating more than $100,000 in annual revenue, bringing the total to 2,278. Today the company serves over 500,000 customers, which has grown by 36% compared to a year ago.
The growth was driven largely by new customers. The company’s revenue grew by 54% year over year (YOY) to $1.02bn in Q2. And it was predominantly raised through operations. That certainly provides a good chunk of liquidity. Zoom ended the second quarter of its 2022 fiscal year with $5.2bn in cash and equivalents. Providing it can continue to do so, Zoom, in my opinion, looks like an exciting business to have in my portfolio. And from what I can tell, it’s so far managing to achieve this.
The company’s revenue largely depends on its ability to retain existing customers and attract new ones. Most customers are introduced as free users of its products and are later converted into paying subscribers. That’s why Zoom’s stock price exploded last year. Naturally this proved to be exceptionally useful in 2020 when the pandemic forced the introduction of lockdown restrictions. The company helps businesses and organisations to bring their teams together in a frictionless environment to get more done without needing to be in the same room. Zoom is an easy and reliable cloud platform for video & voice chat, as well as content sharing. So, is this a buying opportunity? Zoom’s exploding stock price in 2020 Undoubtedly, this brought more income for the company.Īlthough the Zoom stock price surged in 2020, it’s down over 11% since the start of 2021 and down by 21% over the last 12 months. Amidst the lockdown, several companies used Zoom’s platform to connect to their customers, investors and employees. The Zoom Video Communications ( NASDAQ:ZM) stock price reached an all-time high of $588.84 last October.
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