My concern with ZM is that I've seen so many of these come and go over the years (GoToMeeting, Webex, BlueJeans, etc) and as a frequent end user, it doesn't feel like ZM has enough of a competitive advantage or "stickiness" to fend off competitors for years to come. The Phone and Contact Center thing could help but aren't proven yet. When forced to cut costs, there's a risk that like you said companies will not renew their Zoom subscriptions and consolidate on Teams/Google Meet instead. The same thing happened to Box in the cloud storage space for example. The numbers are starting to look attractive though.
definitely a risk. that said, it seems like Zoom does have a bit more of an edge in terms of the product, no? my sense - and my personal usage beyond Zoom is close to zero - is that their product legitimately is better than those of rivals.
After all, before the pandemic, ZM had one of the highest P/S multiples among large-cap stocks. I do wonder if that part too is getting forgotten - investors *really* liked this business even in 2019. The bull case I think is that comes back around at some point - the bear case is probably that competition rises before that point.
Thanks for the great analysis as always.
My concern with ZM is that I've seen so many of these come and go over the years (GoToMeeting, Webex, BlueJeans, etc) and as a frequent end user, it doesn't feel like ZM has enough of a competitive advantage or "stickiness" to fend off competitors for years to come. The Phone and Contact Center thing could help but aren't proven yet. When forced to cut costs, there's a risk that like you said companies will not renew their Zoom subscriptions and consolidate on Teams/Google Meet instead. The same thing happened to Box in the cloud storage space for example. The numbers are starting to look attractive though.
definitely a risk. that said, it seems like Zoom does have a bit more of an edge in terms of the product, no? my sense - and my personal usage beyond Zoom is close to zero - is that their product legitimately is better than those of rivals.
After all, before the pandemic, ZM had one of the highest P/S multiples among large-cap stocks. I do wonder if that part too is getting forgotten - investors *really* liked this business even in 2019. The bull case I think is that comes back around at some point - the bear case is probably that competition rises before that point.