Today, there are over 1,500 third party integrations and 50 apps available for use within Zoom meetings. Second, there are also “Zoom Apps” which refer to external applications being available within Zoom video conferences. First, ZM makes it easy for third party integrations to use the ZM video conferencing tool within external apps. ZM expects future growth to come from three pillars. However, I consider ZM to be the de-facto leader in the video conferencing space, and that distinction should enable it to continue churning out healthy growth rates.

Even without FIVN, ZM has performed quite strongly, having grown its topline by a triple digit compounded rate over the last three years and even breaking through with healthy profit margins.īut perhaps investors are wondering what the future might hold as we move beyond the pandemic? I expect growth to slow down significantly as it is unreasonable to expect forward growth that resembles anything like that of the past. That premium has all but disappeared as ZM stock performed quite poorly. When the merger was announced back in mid-July, ZM traded at a material premium to the price to sales multiple of FIVN.

Unfortunately, the merger was just not meant to be. Together, the combined company would have been a more comprehensive omnichannel engagement platform offering, which would have likely helped accelerate growth as compared to the individual companies themselves. ZM would have been able to significantly increase its total addressable market (‘TAM’) to at least $86 billion and that is even prior to accounting for TAM from automation. Why Did Zoom Want to Acquire Five9?Īt first glance, the merger with FIVN would have made a lot of sense. ZM is trading around $257 per share, down around 40% from all time highs.Īs a long term investor, I am typically unfazed by near term volatility (though I am not a shareholder in ZM), but the falling stock price has had implications for its underlying business because it has led to a fall out in its merger agreement with FIVN.

I explain why I am upgrading the stock to a buy rating in spite of widely expected deceleration in growth rates. Has its “zoom” upwards come to an end? In this report I look at what’s ahead for ZM as it moves beyond this failed merger agreement. This came after its stock showed some of its weakest relative performance in recent times. At the end of September, Zoom ( NASDAQ: ZM) announced that it has terminated its merger agreement with Five9 ( FIVN).

Zoom stock 5 year forecast