IB Net Payout Yields Model

Zoom: Desperate Move To Buy Growth

 

  • Zoom agreed to buy Five9 for $14.7 billion, or ~20x forward revenues.
  • The cloud video communications stock is facing a tough year as enterprises return to the office and forecasted growth slows to below 20x.
  • The stock shouldn't trade at more than 10x forward revenues.
  • Looking for more investing ideas like this one? Get them exclusively at Out Fox The Street. Learn More »
The biggest worry with tech stocks that benefitted from the COVID-19 lockdowns was a normalization of business activity leading to a reduction in growth rates going forward. Zoom Video (NASDAQ:ZM) is a prime technology provider that blossomed in 2020 and faces tough growth comps going forward. The company made what appears a desperate move to acquire growth via the expensive deal to buy Five9 (NASDAQ:FIVN). My investment thesis remains bearish on the stock.

Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

August - 30

After reporting FQ2 revenues of $1.021 billion, $ZM just forecast a sequential revenue dip in FQ3. 

-Third Quarter Fiscal Year 2022: Total revenue is expected to be between $1.015 billion and $1.020 billion and non-GAAP income from operations is expected to be between $340.0 million and $345.0 million. Non-GAAP diluted EPS is expected to be between $1.07 and $1.08 with approximately 309 million non-GAAP weighted average shares outstanding.

The stock is down 7% in AHs trading to $322 as the market isn't very happy with the reality of slowing growth. One has to guess the yearly lows are at risk now. 

Finviz Chart

Comments

Popular posts from this blog

Occidental: Still Producing Too Much Oil

ChargePoint: Low Quality Beat

Aurora Cannabis: Deal Or No Deal