Zoom’s share price plummets as revenue growth slows Reuters

© Reuters.

Akash Sriram

(Reuters)-Stocks Zoom video communication (NASDAQ:) Inc fell to a 17-month low on Tuesday after the video conferencing platform announced its slowest quarterly revenue growth due to financially strong competitors Cisco (NASDAQ:), Microsoft (NASDAQ:) and Salesforce ( NYSE:) fierce competition.

The company’s third-quarter revenue of $1.05 billion was reported on Tuesday, which was better than expected, although this figure was an increase of 35% compared to the 360% affected by the pandemic last year.

Brokerage firm Needham said: “Due to the weakening of the micro-segment market trend caused by forward-looking business and temporary pandemic business, revenue growth is still being dragged down. We are looking for a clear view of the growth trough.”

Zoom’s addition of new customers with more than 10 employees also grew at the slowest rate of 18%, which is lower than the level before the pandemic, when the company was not a household name.

Gao Lin analyst Joe McCormack said that the company’s growth in small and medium-sized enterprises may be saturated, and it has hardly penetrated the large enterprise market.

However, it will take longer to develop into a contact center product after the failed transaction to acquire call center software provider Five9 (NASDAQ:) for US$14.7 billion last month.

Zoom’s stock price fell about 14% to US$208.15 in early trading. As the pandemic rages, the value of the stock has almost halved since it peaked at $114 billion last year.

Evercore analysts wrote in a report: “For now, investors need some patience, because we don’t think there is any upcoming catalyst that will change the stock’s sentiment.”

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