I could even argue that those are conservative estimates - as the videoconferencing company continues to mature, its operating margins will likely improve as well. If its earnings before interest, taxes, depreciation, and amortization ( EBITDA) margin and enterprise value-to-EBITDA multiple both remained consistent with their trailing-12-month values of 20.5% and 21%, respectively, the stock's market capitalization would reach $32.4 billion, which is significantly higher than today's $23.8 billion market cap. Let's say that the company can generate $7.5 billion in total revenue by then, which indicates a compound annual growth rate (CAGR) of 10.6% from its fiscal year 2022. Will the company ever return to its pandemic highs, or is it all downhill from here? Let's observe its current situation and see where the company could be five years from today.įive years from today, we'll be more than halfway through 2027, which means Zoom will be in its fiscal year 2028. That's completely understandable, but as long-term investors, we should be more concerned about Zoom's business prospects several years out. Hovering around $80 per share, it's a far cry from the near $600 per share high it once enjoyed during the pandemic.Īs the global economy continues to reopen, the videoconferencing leader can expect to face some growing pains for the foreseeable future. Over the past year, its stock price has crumbled 73%.
That said, it seems as if many investors have written off Zoom in a post- pandemic world, and its stock price movement shows that. That makes sense in a way - COVID-19-related lockdowns triggered an abrupt shift to remote work, which in turn led to rapid adoption of the company's services.
It may take time for many companies to shake the label of "pandemic stock." One company many associate with the pandemic is Zoom Video Communications ( ZM -0.48%).
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