Zoom’s Stock Price Plunges As CFO Discusses Concerns Over Businesses Reopening

Zoom had been one of the best-performing stocks over the past year, thanks to the Coronavirus pandemic forcing people to work from home. However, with businesses and offices now reopening, the company might face growth challenges.

Zoom Could Face Some Challenges

The Chief Financial Officer (CFO) of Zoom Kelly Steckelberg told CNBC’s Squawk Box earlier today that the company could face growth challenges as businesses and offices start to reopen. Zoom’s video interactive software has gained massive over the past 18 months, thanks to the Coronavirus.

The pandemic forced businesses and offices to operate from home, with meetings turning virtual. As a result, corporate entities and freelancers turned to Zoom to carry out their meetings despite the pandemic.

However, with the vaccinated population now increasing and businesses operating again, live events and meetings have started again. This has affected Zoom’s performance, and it could extend for the coming months.

The CFO said, “What we’re seeing… is headwinds in our mass markets, so these are individual consumers and small businesses. And, as you say, they are now moving around the world. People are taking vacations again, they’re going to happy hours in person.”

With the fast rate businesses and offices are reopening, the CFO added that their guidance for the rest of the year is not so positive, and this will reflect in the stock’s performance. In its latest guidance, Zoom expects massive growth from its direct and channel businesses. However, it expects a decrease in its online businesses due to the challenges facing smaller customers and consumers.

Zoom’s stock price is down by 15% so far today, becoming one of the biggest losers in the market. ZM is trading at $292 per share at the time of this report.

Zoom Delivers Excellent Q2 Earnings

The CFO’s comments come 24 hours after the company delivered an excellent second-quarter earnings result. In the second half of 2021, Zoom’s earnings per share were $1.36, surpassing the analysts’ estimate of $1.16. The revenue of $1.02 billion also surpassed the $991.0 million as expected by analysts.

The revenue increase was 54% year-over-year for the second quarter. However, Zoom’s growth had reduced during the previous quarter. The first quarter of the year saw Zoom record a 191% growth rate, but it expects it to be 31% in the current quarter.