To The Moon

I remember Cathie Wood expected in April that $Tesla Motors(TSLA)$ would reach $4600 in 2026. Recently, she expected that $Zoom(ZM)$ would reach $1500 in 2026.

$Zoom(ZM)$: Bubble Disappear

During the pandemic, most employees had to work remotely from home, and video conferencing software developer Zoom is one of the biggest beneficiaries of the pandemic economy. Zoom has recorded five consecutive quarters of triple-digit revenue growth, and its stock price has soared.

However, as corporate employees return to work, Zoom's growth has slowed significantly. The market value has evaporated rapidly since last year.

In October 2020, Zoom's stock price peaked at $559. Today, it is down more than 80% from its previous high. When demand decreases, zoom has to usher in a return of value

Let's see ARK's analysis of Zoom.

ARK’s open-source Zoom model simulates eight independent inputs to forecast a range of price targets. In their view, four of those inputs are the most important drivers for the business, as shown in the corresponding colors below.

Adoption of Hybrid/Remote Working Models

In June 2021, Gartner projected that 51% of knowledge workers worldwide would adopt either a hybrid or a fully remote working model by the end of that year. By January 2022, Slack estimated that approximately 58% and 12% of all global knowledge workers worked in hybrid or fully remote arrangements, respectively, while ~30% worked in a business office outside of the home every day. Although a perceived decline in the severity of Covid influenced many firms to reopen offices and reinstate 100% in-office mandates, which lowered the penetration of hybrid/ remote working models to 66%, we believe that knowledge worker backlash and talent shortages will compel employers to adopt more flexible arrangements.

Zoom’s Video Communications Traffic Share

According to Similarweb, Zoom’s market share dropped from 52% in 2019 to 48% in 2021, suggesting that increasing competition from other collaboration and communication suite providers could limit Zoom’s future penetration of global knowledge worker activity. That said, they expect the company to remain a dominant provider of cloud-based communications during the next five years.

In the chart below, they detail base, downside, and upside projections for total unique Zoom users. In mean projection, they expect the number to increase 7% at a compound annual rate from 212 million––or 43% of the current addressable market––to 291 million––or 35% of the total addressable market––by 2026. In downside projection, they expect total unique users to decrease 5% at an annual rate to 166 million––or 20% of the total addressable market. Finally, in upside projection, they expect total unique users to increase 14% at an annual rate to 416 million––or 50% of the total addressable market.

Zoom’s Monetization Share of User Base and ARPU

For more information: https://ark-invest.com/articles/analyst-research/arks-zoom-model/

SHARE YOUR THOUGHTS

Do you agree with Cathie Wood's expectations? Why or why not?

You may be rewarded with Tiger Coins for sharing your thoughts in the comment💸💸💸

Follow me! Don't forget I am the richest tiger in this community😎😎