Zoom Video Communications Inc. (ZM) shares fell for the second straight day on Tuesday following the announcement from Pfizer that its coronavirus vaccine prevented more than 90 percent of infections in late stage trials without any notable side effect. The apparent reason behind the decline seems to be investors perception that the growth of the companies that greatly benefited from lockdowns during the coronavirus pandemic will now slow down after the vaccine is widely made available around the world.
Zoom greatly capitalized on opportunities offered to it during the pandemic, when people were forced to work from home. Many turned to its platform for interacting with each other, driving its share price to new highs. The company’s stock has jumped nearly 500 percent so far this year, excluding today’s fall.
The San Jose, California-based communications technology company posted revenue of $664.5 million for the second quarter that ended on July 31, representing a massive surge of 355 percent on year-over-year basis. For the fourth quarter, the company expects to report revenue in a range of $730 million to $750 million. However, some industry analysts have forecasted a slowdown in Zoom’s growth trajectory, as the economies around the world return to normalcy.
Looking forward, it is still unclear how quickly the vaccine is approved and made widely available, and in what ways it will affect the growth of Zoom. The key question is whether people will stop using the video calling apps like Zoom once the pandemic ends or the trend will continue in the years to come.
Zoom Video (NASDAQ: ZM) declined nearly 5 percent in the mid-day trading Tuesday on heavy volume of about 14 million shares, as compared to average daily volume of 10.85 million shares. The 52-week range of the stock is $62.02-$588.84, while the company’s market capitalization is approx. $111.359 billion.
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