ZM - Zoom

[valueinvestor]

Market's are weird.

 

How's this trading at above 100x earnings?

 

I get that the coronavirus will encourage remote work, but for this to be justified revenues have to grow like 100% y-o-y.

[gg]

I don't own the stock because it's not my sort of thing. But there is no doubt -- literally zero -- that their revenues will increase by way, way more than 100% yoy. No doubt

 

It's not even an expensive product, like $15-20 per account. I personally know of dozens of companies that have signed on in the past few weeks. The real question is what % of those customers will be around in 12 months

[Read the Footnotes]

Market's are weird.

 

How's this trading at above 100x earnings?

 

I get that the coronavirus will encourage remote work, but for this to be justified revenues have to grow like 100% y-o-y.

 

Every school in the country is going online. Lots of them are choosing Zoom. That's one of the greatest growth stories of all time. On the other hand, the type of business they are getting in not the stickiest type and the decay rate is hard to estimate. A lot of their new customers have based their business model off of insisting that in person education is what sets them apart, so it's not clear how the world just changed. How can they claim that 9 months of online education is equivalent to 9 months of in person education and then immediately go back to saying that in person education is superior and that the physical community is what sets them apart. I haven't fully answered that question, but I do know they will try.

 

For what it's worth, my forecasts turned out to be incredibly accurate, I had sources telling me about the purchasing decision that were being made relative to Zoom and I didn't buy Zoom.

[Guest Schwab711]

Market's are weird.

 

How's this trading at above 100x earnings?

 

I get that the coronavirus will encourage remote work, but for this to be justified revenues have to grow like 100% y-o-y.

 

Every school in the country is going online. Lots of them are choosing Zoom. That's one of the greatest growth stories of all time. On the other hand, the type of business they are getting in not the stickiest type and the decay rate is hard to estimate. A lot of their new customers have based their business model off of insisting that in person education is what sets them apart, so it's not clear how the world just changed. How can they claim that 9 months of online education is equivalent to 9 months of in person education and then immediately go back to saying that in person education is superior and that the physical community is what sets them apart. I haven't fully answered that question, but I do know they will try.

 

For what it's worth, my forecasts turned out to be incredibly accurate, I had sources telling me about the purchasing decision that were being made relative to Zoom and I didn't buy Zoom.

 

Not sure about valuation either but totally agree with RTF. This is probably one of the only growth stories that truly won't be affected by COVID-19 or any associated global recession. That's valuable right now.

[txvalue]

Echoing what was mentioned earlier, in addition to public schools using it many large universities are using it for lecture replacements as classes move online for the remainder of the year.  Because of these things the growth is clearly going to be there.

 

Its last Q revenue was under 200 million and the market cap is what 30 billion?  I think this is basically a ok quality video platform that is growing quickly because its easy to use (not the best quality), unless they are acquired that market cap looks like a stretch for now.

[DooDiligence]

My school (PSC) will be using Zoom to restart classes on Monday.

[ritrading]

I haven't used Zoom before, but I have used other stuff. Cisco, google hangouts, skype.... does Zoom do something extraordinary which give users a reason to switch over from?

[Castanza]

I haven't used Zoom before, but I have used other stuff. Cisco, google hangouts, skype.... does Zoom do something extraordinary which give users a reason to switch over from?

 

I believe it’s the simplicity and relatively cheap cost to implement it for organizations who typically dont use any type of teleconference software regularly. Skype, Teams, and Cisco requires expensive licenses at enterprise levels. Just a hunch though. We use Skype and Cisco vpn at my work. I’ve used Zoom and  it’s adequate.

[Cevian]

My kids are using Microsoft Teams at their school

[Gregmal]

Zoom is the coronavirus inspired GoPro. Eventually real players will take this space too. Probably MSFT imo.

[vpagano]

The viral low-friction nature of Zoom means significantly lower CAC, see image for payback comps.

[DooDiligence]

I had a virtual theory class today using Zoom.

It was just me & the instructor (I'm the guinea pig).

 

He gave me a great explanation of some difficult new material on Romanticism,

including demonstrations from Romantic era composers to illustrate the material.

 

It was like being in class, including when he passed out homework & a quiz, via email, during the Zoom.

 

The interface is pretty simple.

 

I'm OK with saving an hour & 20 minutes driving back & forth to school every day.

[Liberty]

https://citizenlab.ca/2020/04/move-fast-roll-your-own-crypto-a-quick-look-at-the-confidentiality-of-zoom-meetings/

[gfp]

I had an opportunity to review the contract Zoom signed earlier this year with Northwestern Mutual - which was a large deal for Zoom.  They negotiated all the way down to $5 per license (per month) and Zoom is giving them the first 12 months free of charge (and a bunch of free Zoom rooms and other stuff thrown in).  Just thought it was interesting to see the actual terms of some of the larger enterprise deals they are signing.  Does not look like a good long at almost $50 billion.

 

*edit - just pulling up a chart it reminds me of this commodities trading mentor I had when I was a teenager.  He would call this one a "bearish rising wedge."  Not a technical analyst myself by any means, but that does look like the textbook example of that pattern.  Time will tell I suppose

[Spekulatius]

So if a short form Video web site is a national security concern how about Zoom. There is likely 1000x more valuable and proprietary content in Zoom meetings than in TikTok.

Apparently a lot of the Zoom development staff is located in Chiba and done development is done by entities that are not even controlled by Zoom.

 

How can this not raise issues? My own company doesn’t use Zoom because the understanding is that it wouldn’t be ITAR compliant.

 

It seems to me that we are investigating the mouse ( TikTok) and forget about the Elephant in the room ( Zoom).

[Read the Footnotes]

So if a short form Video web site is a national security concern how about Zoom. There is likely 1000x more valuable and proprietary content in Zoom meetings than in TikTok.

Apparently a lot of the Zoom development staff is located in Chiba and done development is done by entities that are not even controlled by Zoom.

 

How can this not raise issues? My own company doesn’t use Zoom because the understanding is that it wouldn’t be ITAR compliant.

 

It seems to me that we are investigating the mouse ( TikTok) and forget about the Elephant in the room ( Zoom).

You're being more politic than I was when I made this argument to you on Saturday. As I said then, my only explanation is that Zoom users didn't claim responsibility for the Tulsa rally debacle.

 

My fear is that when we look back on this in ten years and people ask "what did we completely ignore in the Pandemic that cost us the most", it could be that the answer will be that we gave IP to China through Zoom.

 

I looked in to Zoom as an investment back in early February before it was widely held public knowledge that Zoom was being chosen by many IT departments. Among the top reasons for not making an investment was my concern that the China risk was great enough to pose a business risk in addition to a "can I sleep at night" with the ethical concerns regarding this business.

[Spekulatius]

So if a short form Video web site is a national security concern how about Zoom. There is likely 1000x more valuable and proprietary content in Zoom meetings than in TikTok.

Apparently a lot of the Zoom development staff is located in Chiba and done development is done by entities that are not even controlled by Zoom.

 

How can this not raise issues? My own company doesn’t use Zoom because the understanding is that it wouldn’t be ITAR compliant.

 

It seems to me that we are investigating the mouse ( TikTok) and forget about the Elephant in the room ( Zoom).

You're being more politic than I was when I made this argument to you on Saturday. As I said then, my only explanation is that Zoom users didn't claim responsibility for the Tulsa rally debacle.

 

My fear is that when we look back on this in ten years and people ask "what did we completely ignore in the Pandemic that cost us the most", it could be that the answer will be that we gave IP to China through Zoom.

 

I looked in to Zoom as an investment back in early February before it was widely held public knowledge that Zoom was being chosen by many IT departments. Among the top reasons for not making an investment was my concern that the China risk was great enough to pose a business risk in addition to a "can I sleep at night" with the ethical concerns regarding this business.

 

The post wasn’t meant to be political. It is hard to say how much of a security risk Zoom really is, but since we know that there is some Chinese connection in writing the code and that Silicon Valley tends to break things first and asks for forgiveness later, I would consider it really carefully if I would use it as a corporation.

 

As I mentioned before, some of my work is defense related and I don’t know any defense company that suggested using it for their CC.p so far.

 

My sons school uses it, but there likely isn’t much in terms of proprietary information to be gained.

[clutch]

My thoughts on ZM had a 180 deg turn recently... I thought it was a great product considering my personal experience and everyone else who used them... but I gotta admit now, there is nothing special about it!

 

I tried googling if ZM actually has any technical competitive advantage over other software... Couldn't find anything definitive. What would make ZM stay in power when all previous similar software have come and went... Skype, Webex, GoToMeering, Bluejeans...etc.

 

Having said that, is this one of the easiest short out there? Many of us should get vaccinated by the end of summer and we might be already going back to normal by the fall... I really find it hard how ZM will continue to grow at the similar rate without the pandemic tailwind... Yet the valuation is still crazy. what do you say?

[deadspace]

My thoughts on ZM had a 180 deg turn recently... I thought it was a great product considering my personal experience and everyone else who used them... but I gotta admit now, there is nothing special about it!

 

I tried googling if ZM actually has any technical competitive advantage over other software... Couldn't find anything definitive. What would make ZM stay in power when all previous similar software have come and went... Skype, Webex, GoToMeering, Bluejeans...etc.

 

Having said that, is this one of the easiest short out there? Many of us should get vaccinated by the end of summer and we might be already going back to normal by the fall... I really find it hard how ZM will continue to grow at the similar rate without the pandemic tailwind... Yet the valuation is still crazy. what do you say?

 

 

I would never short this

Sometimes the best moats are the simplest

The fact that zoom just works is plenty a moat compared to their brain dead competitors

They have excellent product market fit and this could go way higher

[Spekulatius]

My thoughts on ZM had a 180 deg turn recently... I thought it was a great product considering my personal experience and everyone else who used them... but I gotta admit now, there is nothing special about it!

 

I tried googling if ZM actually has any technical competitive advantage over other software... Couldn't find anything definitive. What would make ZM stay in power when all previous similar software have come and went... Skype, Webex, GoToMeering, Bluejeans...etc.

 

Having said that, is this one of the easiest short out there? Many of us should get vaccinated by the end of summer and we might be already going back to normal by the fall... I really find it hard how ZM will continue to grow at the similar rate without the pandemic tailwind... Yet the valuation is still crazy. what do you say?

 

 

I would never short this

Sometimes the best moats are the simplest

The fact that zoom just works is plenty a moat compared to their brain dead competitors

They have excellent product market fit and this could go way higher

 

I have used  Zoom and other products both at work and for fun for remote meetings and what exactly is the difference? They all work.

[cameronfen]

My thoughts on ZM had a 180 deg turn recently... I thought it was a great product considering my personal experience and everyone else who used them... but I gotta admit now, there is nothing special about it!

 

I tried googling if ZM actually has any technical competitive advantage over other software... Couldn't find anything definitive. What would make ZM stay in power when all previous similar software have come and went... Skype, Webex, GoToMeering, Bluejeans...etc.

 

Having said that, is this one of the easiest short out there? Many of us should get vaccinated by the end of summer and we might be already going back to normal by the fall... I really find it hard how ZM will continue to grow at the similar rate without the pandemic tailwind... Yet the valuation is still crazy. what do you say?

 

 

I would never short this

Sometimes the best moats are the simplest

The fact that zoom just works is plenty a moat compared to their brain dead competitors

They have excellent product market fit and this could go way higher

 

I have used  Zoom and other products both at work and for fun for remote meetings and what exactly is the difference? They all work.

 

They say there is less of a latency problem on zoom especially compared to BlueJeans and Teams.  I’ve noticed it but maybe it was because I was primed to.