Shares of Zoom Video Communications (ZM) – Get Report fell sharply Tuesday, as analysts expressed concern about valuation despite the video-conferencing company releasing a strong earnings report.
Zoom recently traded at $424.98, down almost 11%. But the stock skyrocketed 603% year to date through Monday, with usage exploding as the coronavirus pandemic forced people to stay at home.
For its fiscal 2021 third quarter ended Oct. 31, San Jose-based Zoom reported profit of 99 cents per share on revenue of $777.2 million. Analysts expected earnings of 76 cents per share with revenue of $693.95 million.
After Covid, however, the work-from-home and school-from-home dynamic may diminish, Morgan Stanley analysts said, according to Bloomberg. Morgan Stanley has an equal weight rating and a $380 price target on Zoom. The total addressable market of $100 billion leaves plenty of room for growth, but the analysts see valuation trading between their