Shares of Zoom Video Communications Inc fell nearly 17% on Tuesday.
The video conferencing company released data showing a faster-than-expected drop in demand, leaving analysts wondering what Zoom plans to do when people go back to work.
With the relaxation of pandemic restrictions, Zoom should now be looking for new growth opportunities. In July, the video conferencing platform bet $14.7 billion on Five9 to boost its contact center business.
Analysts expect it could take a few quarters for Zoom to return to its actual underlying growth rate.
Zoom forecast revenue for the current quarter revenue between $1.015 billion and $1.020 billion on Monday, an increase of 31% compared with multiple-fold growth rates in 2020.
At least six brokerages slashed their price targets for Zoom, according to Refinitiv data, with Piper Sandler slashing its price target by more than $100 to $369.
The company’s shares traded on Tuesday at $289.50, their worst level in more than nine months.
The company’s shares rallied to exponential highs since February last year, reaching a valuation of $175 billion in October. Since then, share prices have eased and Zoom’s current capitalization is now half of its October peak.
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