Why Zoom shouldn’t fear slowing growth

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Zoom (NASDAQ: ZM) the action dragged the market into 2021 over fears of a sharp slowdown in growth in the wake of the pandemic. But the video communications giant could weather a slump without sacrificing investor returns.

In this “The Five” video by Motley Fool Live, recorded on October 12, Fool contributors Jose Najarro and Brian Withers discuss Zoom’s growth prospects in a potentially slowing global economy.

Brian Withers: For me, given the economic conditions, I would say Zoom Video Communications. The need for communication does not disappear. Businesses, no matter where their employees are and whether or not they return to the office, it is likely that many of these businesses and employees will continue to work from home, and Zoom therefore survived the coronavirus.

If I look at the Zoom review, I haven’t looked at it in the last week, but the last time I looked at it it was even cheaper than it was before the coronavirus.

Every measure of Zoom has improved its bottom line, its cash flow, its turnover, the balance sheet has more liquidity than ever. I think Zoom has a lot to do and whether the economy is doing well or not, companies will have to get their employees to communicate with each other.

Once we take the genie out of the bag, we can now work from home and Zoom is a key part of making it happen. Excited about Zoom’s future for the next 5.10 years.

José Najarro: Zoom continued to launch new products. There the Zoom phone is growing at insane levels, I think, both internationally and nationally. As you mentioned, Brian. Strong numbers on their balance sheets and everything, but they also have new services to provide to their customers.

Withers: Yes. We spent a whole hour on Zoom, Jon Quast and I and you mentioned the Zoom phone. It’s actually going to be a potential revenue accelerator as businesses come back to the office.

Because what it does is that it doesn’t necessarily replace the phone that sits on employee desks.

What it does is that it is managed as a complete back-end of the process and allows businesses to not have to connect to the telephone network. It manages its own internal call infrastructure within the Zoom network and belongs to it from its video part. They own the piece of the phone.

It only makes sense. The other thing that gets me excited about Zoom is that I talked about Zoom rooms, where as businesses come back to the office, they’ll want every conference room to be Zoom enabled.

This is really something that won’t happen until people start coming back to the office. I’m not surprised it’s not yet a big highlight. Much like there.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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