If You Invested $1,000 In Zoom Video Stock One Year Ago, Here's How Much You'd Have Now
Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return over the last 12 months is 74.3%. But there is no question some big-name stocks performed better than others along the way.
Zoom Video’s Big Run: One company that has been a solid investment in the past year has been work-from-home play Zoom Video Communications Inc (NASDAQ: ZM).
Zoom Video first went public via an IPO in April 2019. The stock quickly surged above its $36 IPO price and topped out at $104.49 in mid-2019 before dipping all the way back down to around $60 by the end of the year.
Fortunately for Zoom investors, the 2020 pandemic may end up being the greatest bullish catalyst of all time for Zoom’s business and stock. When quarantine and social distancing measures were implemented in early 2020, all professional and personal communications were forced online. Zoom’s video conferencing software was at the epicenter of a boom in remote work software demand.
At the beginning of 2020, Zoom shares were trading at around $69. By the beginning of March, the stock was already up to $109 after news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.
When the S&P 500 bottomed on March 23, Zoom shares were doing just fine trading at $142. The worse the pandemic got, the more customers were flocking to Zoom.
By June 2, Zoom shares were above $200 for the first time and hit a high of $588.84 in September. In October, Zoom’s market cap crossed $140 billion, making it more valuable than Exxon Mobil Corporation (NYSE: XOM) at the time.
In fiscal 2020, Zoom generated net income of $25.3 million on $622.6 million in revenue. In fiscal 2021, Zoom’s net income jumped to $672.3 while its revenue increased to $2.65 billion.
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Zoom In 2021, Beyond: The stock has since pulled back to around $340. Concerns over Zoom’s lofty valuation, the potential negative impact of the vaccine rollouts and the company’s seemingly impossible year-over-year growth comps in 2021 have likely weighed on the share price.
Still, Zoom investors who bought one year ago and held on have generated a big return on their investment. In fact, $1,000 in Zoom stock bought on March 24, 2020, would be worth about $2,632 today.
Looking ahead, analysts are expecting Zoom’s rally to resume in the next 12 months. The average price target among the 21 analysts covering the stock is $501, suggesting 45.6% upside from current levels.
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