5 Best Education Stocks To Buy Now

2. Zoom Video Communications, Inc. (NASDAQ:ZM)

No of HFs: 56

Total Value of HF Holdings: $9.7 Billion

Zoom Video Communications, Inc. is an American communications technology company that provides video telephony and online chat services through a cloud-based software. During the fourth quarter of 2020, the company reported a revenue of $188.3 million.

In an article, we mentioned Bill Nygren’s investor letter highlighting Zoom as of the biggest newcomers to the large-cap this year.

“The biggest newcomer to the large-cap list this year was Zoom Video Communications. The company has a market cap of $134 billion and sells at nearly 100 times trailing sales. With so many people working from home, video conferencing has been a lifesaver. Most days I have multiple video calls. When people talk about changes from the past six months that are likely to outlast Covid-19, increased use of video conferencing is at the top of most lists. I use Zoom frequently and love the service. But I also use Cisco WebEx, Microsoft Teams, Google Meet, Apple FaceTime and Verizon Blue Jeans Meetings. When I’m on a call, it’s hard to remember which one I’m using because the services are so similar. Zoom’s competitors are not underfunded startups, but rather are some of the biggest businesses in the world. While it is easy to project that video conferencing will grow over the next decade, there is a wide range in the growth estimates, and it is hard to predict what market shares will be, what the services will cost or what profit margins will look like. Zoom faces the uncertainties you’d expect for a young company with $1 billion of sales. But its future is much more uncertain than you’d typically see from a $134 billion market-cap stock. Will Zoom stock perform well from here? I have no idea. But I do know the range of possible outcomes for the business is much wider than it is for most companies that enjoy a market cap above $100 billion.”

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