Zooming up the stock market

Wall Street analysts raised price targets for Zoom Video Communications on 1 September 2020 as its shares hit a record high, while warning that a return to office work could hamper its success in luring small corporate customers.

Zoom shares soared as much as 47 per cent to $478 in morning trade, with brokerages raising price guidance by an average of $161 after the company reported blockbuster quarterly results and lifted its annual revenue forecast.

The numbers also indicate that one of the success stories during the coronavirus pandemic is turning its huge free-user base into hard cash. Chief Financial Officer Kelly Steckelberg said Zoom revenue grew so quickly that it was hard to keep investing at the same pace.

The top-growing sectors for the company during its second quarter were education, non-profits, manufacturing and healthcare, she told Reuters on Tuesday.

"With ZM now clearly established as the global leader in the video collaboration market, its success paves a clear path to compete in the enterprise market," Rosenblatt analysts wrote. J.P.Morgan analyst Sterling Auty, however, warned the churn rate for Zoom′s high-risk small customers pointed to the risk of a pullback in revenue as the pandemic eases.