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Shares of Zoom Video Communications (NASDAQ:ZM) have been on an absolute tear recently. The stock is up +140% during the last six months and +70% in the last three months alone. Investor optimism for the videoconferencing company is fueled both by its strong business performance before the coronavirus pandemic and Zoom's perfect positioning to benefit from the rise of work-from-home trends during the pandemic.
Zoom is slated to report its first-quarter results for fiscal 2021 after the market close on Tuesday, June 2nd and investor expectations are high. Investors have driven shares of the unified-communications platform provider up 54% since its last quarterly report was released on March 4. The S&P 500 has returned negative 2% over this period. In 2020, Zoom stock is up 164% -- while the broader market is down about 5% -- making it one of best-performing "coronavirus stocks".
In 2019, Zoom Video Communications went public. In its prospectus, it listed its total addressable market (TAM) as $43 billion by 2022. Just over one year later, shares are up more than four times in value, and the company's market capitalization is over $50 billion.
As of May 15, 2020, Zoom’s market capitalization has skyrocketed to $48.8 billio and it worths nore than the world’s 7 biggest airlines.
Even if the pandemic were to end tomorrow, which we know it won't, a brand new collaboration technology has been unleashed on global businesses. We can now see just how easy it is to collaborate online, whether it be with friends and family or, more importantly, for business. And Wall Street has taken notice by sending ZM shares soaring:
When the company reports first-quarter earnings on June 2, growth should be impressive. The pandemic-induced global lockdowns forced organizations to transition to remote work. This led to the widespread adoption of videoconferencing platforms, including Zoom.
Revenue is expected to come in between $199 million and $201 million in the first quarter of fiscal 2021. Given the previous quarter's 78% year-over-year revenue increase to $188.3 million, and with shelter-at-home orders in place for much of the quarter, Zoom should easily meet or exceed the estimate.
After the pandemic, Zoom hopes to capitalize on its newfound popularity and continue to grow. It's not yet clear if remote work will still be as extensive as during the lockdown, but Zoom's success already makes it one of the top videoconferencing companies in the U.S.