Latest news with #video conferencing
Yahoo
04-08-2025
- Business
- Yahoo
Zoom Stock Outperformed the Market Over the Last Year. Time To Buy?
Key Points Zoom remains the leading video conferencing platform. Slow revenue growth has likely dampened investor enthusiasm. The stock's valuation is falling, but is that enough to attract investors? 10 stocks we like better than Zoom Communications › Zoom Video Communications (NASDAQ: ZM) has struggled in recent years. Interest in the pandemic darling waned as people returned to offline activities. Moreover, numerous competing platforms have emerged, leading investors to question how much of a competitive moat the company can claim. Nonetheless, Zoom is still the leading online meeting platform. Also, even though the stock trades at a small fraction of its 2020 high, it outperformed the S&P 500 over the past year. The question for investors is whether such conditions present an opportunity or if they are better off staying away from this stock. Where Zoom stands In many respects, Zoom has continued to benefit from the legacy of the pandemic. Many workers never returned to the office, meaning that online meeting technology is still essential. Additionally, Zoom remains the dominant online meeting platform. According to Wall Street Zen, it claims a 57% market share. This is well ahead of the second-largest platform, Microsoft's Teams, at 25%. Other competitors, such as Alphabet's Google Teams and Webex from Cisco Systems, each claim a 6% market share. Unfortunately, for Zoom shareholders, it may not experience the growth they might want. Grand View Research forecasts the global video conferencing market will expand at a compound annual growth rate (CAGR) of 8% through 2033. That means the market size, which is around $12 billion now, would grow to $24 billion over the next eight years. That may leave investors questioning how much more Zoom can grow. At a market cap of around $23 billion, its size nearly matches the estimated size of the video conferencing market. In Zoom's defense, the company is more than online meetings. With its phone, chat, and AI capabilities, it is a communications ecosystem. Still, since its competitors also offer comparable capabilities, investors may question how much that will help the stock long-term. Zoom's financials The financial state of Zoom seems to confirm its bleak outlook. In the first quarter of fiscal 2026 (ended April 30), the company reported just under $1.2 billion in revenue, a yearly gain of less than 3%. This means it underperforms the aforementioned industry CAGR, and since revenue also grew by around 3% in fiscal 2025, this slow growth is not a one-time occurrence. The profit picture looks slightly more favorable. The company reduced operating expenses in fiscal Q1, meaning its $255 million in net income rose by 18% compared to year-ago levels. Still, since net income grew by 59% in fiscal 2025, profit growth has slowed significantly. Likewise, Zoom's fiscal 2026 revenue estimate is between $4.80 billion and $4.81 billion. This amounts to a 3% increase, leaving its revenue growth consistent but modest. Admittedly, that did not stop Zoom stock from outperforming the S&P 500, rising by more than 20% over the last year. Also, the stock sells for a P/E ratio of 22. When also factoring in the forward P/E ratio of 13, one might assume the valuation factors in the company's challenges. Still, this forces investors to decide whether that makes it cheap enough to buy or whether investors are better off staying away from Zoom stock. Should I buy Zoom stock? Given the current state of Zoom Video Communications, investors have little reason to choose it over the S&P 500. Indeed, the pandemic has built long-term credibility for the company, as workers and consumers continue to rely on its platform, and its dominant market share bodes well for the company. Unfortunately, this industry is probably too small and slow-growing for investors to earn outsized profits in the long term. Industry growth is likely to stay in the single digits, and even with its valuation headed to low levels, the company's modest revenue growth is unlikely to attract widespread investor interest. Thus, even if workers and consumers continue to turn to Zoom, the stock is not on track to deliver outsized gains for its shareholders. Should you invest $1,000 in Zoom Communications right now? Before you buy stock in Zoom Communications, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Zoom Communications wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Cisco Systems, Microsoft, and Zoom Communications. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Zoom Stock Outperformed the Market Over the Last Year. Time To Buy? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
04-08-2025
- Business
- Globe and Mail
Omdia: Global Video Conferencing Market Grows 5% to $18 Billion in 2024 Despite Economic Uncertainty
The global video conferencing (VC) market continues to demonstrate resilience, growing by 5% year-over-year in 2024, to reach $18 billion in revenue according to new analysis from Omdia's Market Landscape report. This growth comes despite challenging geopolitical conditions and ongoing economic uncertainties, factors that could influence hybrid work policies, as businesses continue to reimagine the future of work. With this momentum, the market is projected to continue expanding through 2029. This press release features multimedia. View the full release here: Total video conferencing equipment market revenue "This isn't merely about weathering the storm, it's about strategic transformation,' said Prachi Nema, Principal Analyst, Digital Workplace, Omdia. 'While North America appears saturated and EMEA shows signs of stagnation, Asia & Oceania continue to show promising growth. This reflects the trend in AI adoption, with companies increasingly emphasizing collaboration tools to boost employee productivity in hybrid work settings. The collaborative meetings market grew 4% in 2024, while the VC devices experienced a 6% year-over-year increase. This growth is particularly noteworthy amid ongoing economic slowdowns and shifting enterprise priorities. In the short-to-medium term, Omdia expects the market to grow at a 5% CAGR over the next five years, with total revenue reaching $21 billion by 2029. New users in Asia & Oceania, and EMEA, as well as emerging use cases across sectors such as healthcare, education, and finance, will drive this growth. Additionally, several factors are reshaping the video conferencing landscape: AI integration is transforming both hardware and software solutions, with features such as automated summaries, translations, and advanced room analytics becoming standard offerings Strategic partnerships between hardware and software vendors are creating new market opportunities and enhancing interoperability Android-based plug-and-play solutions are gaining popularity due to their ease of use and flexibility Microsoft's dominant 49% market share in collaborative meeting services is influencing hardware certification and deployment strategies "However, the market is becoming increasingly commoditized, with very little product differentiation between vendors' offerings," said Nema. The research highlights a significant disparity in meeting room infrastructure worldwide, with only 6.25% of all meeting rooms fully equipped as standardized spaces or native meeting rooms such as Microsoft Teams Rooms or Zoom Rooms. However, the market for bring-your-own-device (BYOD) rooms is significantly larger than standardized meeting rooms. The demand for BYOD rooms, particularly those that provide quick and easy wired/wireless meeting capabilities, is on the rise. Regionally, North America leads with a 42% subscription market share within collaborative meeting services, followed by Europe, the Middle East, and Africa (EMEA) at 27%. Asia & Oceania owns 25% share of the subscription. Globally, only 28% of all meeting rooms have some form of VC capability, highlighting significant growth opportunities for vendors capable of overcoming cost and deployment barriers. Omdia, part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets grounded in real conversations with industry leaders and hundreds of thousands of data points, make our market intelligence our clients' strategic advantage. From R&D to ROI, we identify the greatest opportunities and move the industry forward.
Associated Press
04-08-2025
- Business
- Associated Press
Omdia: Global Video Conferencing Market Grows 5% to $18 Billion in 2024 Despite Economic Uncertainty
LONDON--(BUSINESS WIRE)--Aug 4, 2025-- The global video conferencing (VC) market continues to demonstrate resilience, growing by 5% year-over-year in 2024, to reach $18 billion in revenue according to new analysis from Omdia's Market Landscape report. This growth comes despite challenging geopolitical conditions and ongoing economic uncertainties, factors that could influence hybrid work policies, as businesses continue to reimagine the future of work. With this momentum, the market is projected to continue expanding through 2029. This press release features multimedia. View the full release here: Total video conferencing equipment market revenue 'This isn't merely about weathering the storm, it's about strategic transformation,' said Prachi Nema, Principal Analyst, Digital Workplace, Omdia. 'While North America appears saturated and EMEA shows signs of stagnation, Asia & Oceania continue to show promising growth. This reflects the trend in AI adoption, with companies increasingly emphasizing collaboration tools to boost employee productivity in hybrid work settings. The collaborative meetings market grew 4% in 2024, while the VC devices experienced a 6% year-over-year increase. This growth is particularly noteworthy amid ongoing economic slowdowns and shifting enterprise priorities. In the short-to-medium term, Omdia expects the market to grow at a 5% CAGR over the next five years, with total revenue reaching $21 billion by 2029. New users in Asia & Oceania, and EMEA, as well as emerging use cases across sectors such as healthcare, education, and finance, will drive this growth. Additionally, several factors are reshaping the video conferencing landscape: 'However, the market is becoming increasingly commoditized, with very little product differentiation between vendors' offerings,' said Nema. The research highlights a significant disparity in meeting room infrastructure worldwide, with only 6.25% of all meeting rooms fully equipped as standardized spaces or native meeting rooms such as Microsoft Teams Rooms or Zoom Rooms. However, the market for bring-your-own-device (BYOD) rooms is significantly larger than standardized meeting rooms. The demand for BYOD rooms, particularly those that provide quick and easy wired/wireless meeting capabilities, is on the rise. Regionally, North America leads with a 42% subscription market share within collaborative meeting services, followed by Europe, the Middle East, and Africa (EMEA) at 27%. Asia & Oceania owns 25% share of the subscription. Globally, only 28% of all meeting rooms have some form of VC capability, highlighting significant growth opportunities for vendors capable of overcoming cost and deployment barriers. About Omdia Omdia, part of Informa TechTarget, Inc. (Nasdaq: TTGT), is a technology research and advisory group. Our deep knowledge of tech markets grounded in real conversations with industry leaders and hundreds of thousands of data points, make our market intelligence our clients' strategic advantage. From R&D to ROI, we identify the greatest opportunities and move the industry forward. View source version on CONTACT: Contact: Fasiha Khan:[email protected] KEYWORD: UNITED KINGDOM EUROPE INDUSTRY KEYWORD: CONSUMER ELECTRONICS TECHNOLOGY SEMICONDUCTOR OTHER TECHNOLOGY TELECOMMUNICATIONS SOFTWARE NETWORKS INTERNET VOIP MOBILE/WIRELESS HARDWARE SOURCE: Omdia Copyright Business Wire 2025. PUB: 08/04/2025 06:30 AM/DISC: 08/04/2025 06:30 AM
Yahoo
17-06-2025
- Business
- Yahoo
Zoom Video Communications Stock Has More Than Doubled the Performance of the S&P 500 Over the Last Year. Is It the Beginning of a Long-Term Comeback?
Some investors mistakenly believe that Zoom has completely fallen out of favor, but its revenue is still reaching new highs thanks to a strong enterprise customer base. Zoom needs to better grow its revenue and use its profits to create more shareholder value but the prospects of this happening soon are cloudy. 10 stocks we like better than Zoom Communications › If you bought shares of communications platform Zoom Video Communications (NASDAQ: ZM) in 2020, I'm sorry for your poor returns. The stock is down a whopping 86% from the heights it reached in the early days of the COVID-19 pandemic. That said, if you bought shares of Zoom a year ago, congratulations: You've more than doubled the performance of the S&P 500. As of this writing, Zoom stock is up a nice 27% over the last year, compared to just an 11% return for the market. Some might say I've cherry-picked the timeframe, and perhaps I have. That said, outperforming the S&P 500 over one whole year is noteworthy for Zoom stock after years of underperformance. For that reason, I think it's important to investigate whether this could be the start of a long-term comeback. Zoom is known for its video-conferencing platform. One might think that nobody uses it now that the pandemic is over, but that's far from the truth. The company's revenue is at an all-time high, boosted by ongoing use from enterprise customers. In fact, in its fiscal first quarter of 2026 (the most recent quarter), it had nearly 4,200 customers spending $100,000 or more annually, which was an 8% year-over-year increase. Keep in mind that Zoom is far more than just its well-known video platform. The company has a growing contact center business, among other things. And it's done a good job of adding new features enhanced with artificial intelligence (AI). These are sensible features, such as AI meeting transcription, and have helped keep it relevant well beyond the pandemic. But here's the problem with Zoom: It's simply not growing enough these days to make a difference for shareholders. At least it is growing -- not all companies are. But Zoom's Q1 revenue was only up 3% year over year. And for its entire fiscal 2026, management only expects 3% top-line growth as well. In fact, single-digit growth has been all too common for Zoom over the last three years, as the chart below shows. When it comes to creating meaningful shareholder value, companies usually need more than low single-digit growth. Zoom simply hasn't had enough revenue growth, and nothing appears to be materially improving its outlook. Of course, companies can create value in other ways. Specifically, if profit margins dramatically improved, then perhaps Zoom stock would still perform well even with modest growth. The good news is that Zoom's operating margin has improved. In Q1, the company's operating margin was nearly 21%. For perspective, that's higher than it was in the first quarter of the last three fiscal years. That said, Zoom hasn't really done much with its higher profits. In reality, its balance sheet just keeps improving. It has nearly $8 billion in cash compared with less than $6 billion just a few years ago. It also has no debt. Therefore, it's making money, but it's just sitting there. Some might object and point out that Zoom has been buying back stock like crazy. On the one hand, this is true. According to management, it's spent $1.4 billion on buybacks in just the last 12 months. Buybacks are Zoom's primary way of returning capital to shareholders and creating value. But here's the problem: Because of its generous use of stock-based compensation, Zoom's share count is still near an all-time high. In other words, buybacks aren't creating value because the share count isn't going down. Looking at Zoom from multiple angles, I believe the stock will struggle -- I don't believe it will sustain its outperformance over the past year. Its growth is too modest, and its prospects don't point to a dramatic improvement anytime soon. Its profitability is good, but management is mostly just buying back stock to offset dilution from its stock-based compensation. I say all of this as a patient shareholder -- there are many things that I like about Zoom. But if I'm looking at it realistically today, I don't think it's a compelling investment opportunity. Indeed, I may look to move on from this investment in the near future so I can put that money to better use elsewhere in the stock market. Before you buy stock in Zoom Communications, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Zoom Communications wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Jon Quast has positions in Zoom Communications. The Motley Fool has positions in and recommends Zoom Communications. The Motley Fool has a disclosure policy. Zoom Video Communications Stock Has More Than Doubled the Performance of the S&P 500 Over the Last Year. Is It the Beginning of a Long-Term Comeback? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
