This has been the year of IPOs, with some of the best-known tech companies going public. But the listing of Zoom Video Communications Inc (NASDAQ:ZM) has gone under the radar a bit. On the day Zoom was listed back in April, it soared by as much as 65% and hit $107.34 a share.
It’s currently trading between $75 and $80 a share. Many might be wondering how much higher the stock can go by the end of 2019. According to one analyst; Zoom may actually be primed for further growth. Whether that reflects on Zoom stock price or not is another question.
Analysts Are Bullish
Earlier in September, R. W. Baird revealed that it has initiated coverage on ZM stock and is apparently overweight. In addition to that, they set the target price at $100. The company has been doing business for eight years but it has been reporting revenues for only two years.
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In the meantime, videoconferencing as a service industry has grown significantly and that is, without a doubt, an important growth trigger for Zoom. Despite the recent slowdown in that market, the bank has indicated that the company’s growth rate of 95.7% year on year for Q2 2020 is significant.
Additionally, the company has also been profitable and that is an important factor in this regard. In addition to that, the company has projected full-year sales growth to $590 million, which reflects a rise of 78%. On the other hand, the earnings per share projections have been pegged in the $0.18 to $0.19 range. The analysts have also pointed out that the launch of the Zoom Phone service earlier this year is another growth area for the company.
That being said, the bank has also acknowledged that its valuation of the stock is still a ‘premium’. As a matter of fact, other analysts who cover the industry have stated that there is every chance of the company going back to losses.
That being said, in the long term those same analysts see the company growing at a decent clip. However, it seems unlikely that the Zoom stock is going to touch $100 this year.
