Will Zoom hit $1,500 per Share in 2026?

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/

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

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  • MHh
    ·2022-06-10
    I doubt zoom would ever go away but i do not think number of unique users would be increasing rapidly. Many companies are pushing for face to face, only with some tolerating hybrid
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  • Lynn098
    ·2022-06-11
    Market growth rates are unlikely to go back to Covid levels and strong competitors like Microsoft Teams will prevent it to reach 1500 by 2026
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  • x2espresso
    ·2022-06-11
    quite impossible with sooo many competitor and also they are not improving as a company itself. the only good thing is they are not in debt
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  • Humbly
    ·2022-06-11
    Unless zoom develops a new application that meet users unmet needs, monetising it's user base is easier said than done. Maintaining its user base will also be challenging
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  • Ra007
    ·2022-06-11
    MS Teams and other competitors are making this red ocean- plus return to WIO after Covid will reduce its usage, even though Hybrid is here to stay
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  • koolgal
    ·2022-06-12

    It is not all doom and gloom with Zoom even though its share price has fallen to 80% off its peak. Zoom was the poster child of Covid lockdowns in 2020 and 2021 but in 2022 its growth is slowing down as more people are returning to offices.  Zoom expects its revenue to grow just 10% to 12% in 2022.

    Zoom's brand name is strong and its video conferencing capabilities allow 1000 users with multiple interfaces with Windows, Mac.  Its ease of use, high quality video and crisp audio has pivoted it to a well known household name. 

    However it faces strong competition from Microsoft Teams, Cisco Webex and Google Meet.    Will Zoom hit 1500 per share in 2026?  I doubt it.  That is certainly over the top, unrealistic price target by Cathie Wood.   The current consensus among the analysts is a HOLD with 14 Hold, Target Price of 169.

    With high inflation, rising interest rates, Growth stocks like Zoom is out of favour. 

    @MillionaireTiger  

    @TigerStars  

    @CaptainTiger  

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    • koolgalReplying toKevYu
      Thanks
      2022-06-12
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    • KevYu
      [Strong]
      2022-06-12
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    • KevYu
      [Strong]
      2022-06-12
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  • Chilli Padi
    ·2022-06-12
    At $109, ZM has lost 75% of its yr high despite strong earnings that show upward yearly trend. It is hard for ZM to claim back its glory achieved during the pandemic as wkg from home is no longer norm
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  • daz888888888
    ·2022-06-12
    Very unlikely for Zoom to hit $1,500 in 2026, more likely to hit $1,200 in 2026 as the market returning to a more bullish state may take longer than expected
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  • Mushroom88
    ·2022-06-12
    No, zoom share will not hit that much as the covid slowing get to be controlled then the demand on zoom using will be reduced therefore the zoom share wont be hit $1500 when at year 2026
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  • EdwardLe
    ·2022-06-12
    Well, not sure on what basis it can reach $1500 in a span of 4 hours
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  • RobinChanKH
    ·2022-06-11
    I don't agree. zoom is just like another Netflix. competitors in the market such as MS Teams and others apps are strong too. most importantly, many may not continue the subscription as back to office
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  • Sonoma
    ·2022-06-11
    Unlikely. 2020 was the year Zoom rode the pandemic to skyrocketing success. Today, Microsoft, Cisco, and Google have caught up on video chat technology, offering better products than Zoom.
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  • bwjx
    ·2022-06-11
    Still don't see the moat that zoom have, and with more physical meetings resuming, it seem unlikely that zoom will scale it's business to attain that level of valuation. [Happy]
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  • Huiz84
    ·2022-06-11
    I will tend to disagree with cathie as it does not seem to have a competitive advantages against its competitors and also with more people returning back to workplace to work.
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  • whereareyou
    ·2022-06-12
    Maybe $30. Nothing unique about this company. Saturated market and low margin.
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  • pekss
    ·2022-06-12
    I doubt so, as there are a number of incumbents with strong arms such as Google Meet, Microsoft Teams Room, Cisco Webex, etc, while $Zoom(ZM)$ does not really stand out or has a competitive moat.
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  • Upswing118
    ·2022-06-13
    Nope
    With businesses resuming to normalcy, the need to zoom calls will be reduced,  which will affect its price. We don't expect major lockdowna soon, else it may just move + or minus 20 %🍺
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  • kino318
    ·2022-06-12
    will continue to buy msft
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    • keegs
      Good call
      2022-06-13
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  • Exodus814
    ·2022-06-12
    Zoom during its peak covid period wasnt anywhere close, why would one think it would be even higher in 2026?
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  • Mccoy
    ·2022-06-12
    Zoom has a tough competitor. MS teams has an advantage as Microsoft can integrate Teams into Windows OS and Office.
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