Zoom Video Communications stock tanks on growth concerns
Shares plunged by as much as 17%
Zoom boom: Plastic surgeries increased during the pandemic
Lorenc Plastic Surgery founder Dr. Z. Paul Lorenc explains the 'tremendous boom' in elective surgeries on 'Mornings with Maria'
Zoom Video Communications Inc. was on track for its worst day in almost 10 months after the video-conferencing provider warned demand for its service will slow.
Shares of the San Jose, California-based company plunged by as much as 17% to $288.30 apiece before paring their losses. At session lows, the stock was 49% below its all-time high of $568.34 set on Oct. 19.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ZM | ZOOM VIDEO COMMUNICATIONS INC. | 85.88 | +4.68 | +5.76% |
"We had expected that [a slowdown] towards the end of the year, but it's just happened a little bit more quickly than we expected," Zoom CFO Kelly Steckelberg said on the company’s second-quarter earnings call.
Customer churn is beginning to pick up at businesses with less than 10 employees. At the same time, annual growth in customers with more than 10 employees slowed to 36.4% year over year from 87.3% the prior quarter.
Current quarter and full-year guidance imply a "sharp slowdown in growth," wrote Oppenheimer analyst Rick Schafer.
Zoom reported quarterly revenue surged 54% year over year to a record of $1.02 billion. However, that was well below the 191% growth in the previous quarter and the 355% growth experienced during the height of the pandemic.
Profit in the three months through July 31 was up 70% year over year to $317 million.
Both numbers were ahead of Wall Street estimates.
Looking ahead, Zoom sees annual revenue of $4.01 billion to $4.02 billion, up slightly from the previous estimate of $3.98 billion to $3.99 billion. Adjusted profit is forecast to be between $4.75 and $4.79 a share, compared with its previous range of $4.56 to $4.61 a share.
CLICK HERE TO READ MORE ON FOX BUSINESS
Zoom shares were up 3.02% this year through Monday compared with the S&P 500’s 21% gain.