There are some companies that made out well as a result of the pandemic: Amazon, with people ordering even more stuff online; Clorox, with our renewed sense of sanitation; and Zoom, the video conferencing service that became a household name.
You know your company’s got some buzz when people start using it as a verb. (“You want me to give you a call or just Zoom you?”) But a lot of investors will be wondering just where that company grows from here.
“They were the poster child of COVID,” said Keith Snyder, a senior equity analyst at CFRA Research.
After lockdowns started, Zoom blew up, Snyder said. But, kind of like Peloton, most customers who were going to buy Zoom products have by now.
“Yes, you are still growing, but what is next for your company?” Snyder said. “How are you going to redefine yourself? How are you going to kind of move outside of your comfort zone?”
All signs point to an acquisition, Snyder said. Last year, Zoom tried to acquire the contact center software company Five9, but the deal fell through.
The good news, according to Trevor White at Nucleus Research, is that Zoom is sitting on a lot of cash.
“I want to hear what they’re going to do with all that cash, how they’re going to spend it in a way that’s going to really support a strong growth,” he said.
Because, said White, talk of slow and steady growth of the video conferencing platform likely isn’t going to cut it for investors.