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Zoom (ZM) Explores Email, Messaging, Calendar Services

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Zoom Video Communications ZM is looking to expand its portfolio of offerings beyond workplace video chat into email and calendar services, per a report from The Information.

While the Zoom email service could be rolled out in the first quarter of 2021, the calendar app could take longer. Zoom is expected to benefit from the coronavirus-led spike in usage, which is likely to boost adoption of the expanded services.

Markedly, as of Oct 31, 2020, Zoom Video had roughly 3433,700 customers (with more than 10 employees), which soared 485% year over year.

Moreover, the company is removing the 40 free minutes of video call time capping for four days between Dec 30 and Jan 2, allowing unlimited free calls over the holiday period.

Zoom is undoubtedly one of the biggest gainers of the coronavirus-induced lockdowns, shelter-at-home guidelines and social-distancing trend. The stock has skyrocketed 451.4% on a year-to-date basis, outperforming the Zacks Internet - Software industry’s rally of 115.9%.

As COVID-19 vaccine distribution picks up through 2021, reliance on video conferencing is expected to decline as offices start functioning in regular capacity. Diversifying avenues in such scenario could be a key catalyst for Zoom to continue growth in the near term.

Year-to-Date Performance

Portfolio Expansion to Fend off Competition

Zoom has been benefiting from an expanding enterprise customer base backed by its cloud-native unified communications platform. Its solutions combine video, audio, phone, screen sharing and chat functionalities and make remote-working and collaboration easy.

Markedly, Zoom is one of the leading names in the unified communications and collaboration (UC&C) space, which is expected to witness a healthy CAGR of 27.8% during 2020-2025, per Mordor Intelligence report.

Moreover, the launch of Zoom From Home solutions is expected to help this Zacks Rank #3 (Hold) company maintain its existing enterprise user base and attract more customers. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Expanding upon new potential revenues streams, the company launched Zoom Rooms and Zoom Phone last year. In October, Zoom rolled out products like OnZoom, a video events platform that enables people to sell tickets, and Zoom Apps, which lets people navigate to other workplace apps like Dropbox and Slack within Zoom.

However, the company is facing stiff competition from Cisco’s CSCO Webex as well as bundled productivity solutions with video functionality from Microsoft MSFT and Alphabet GOOGL -owned Google G Suite.

Both Microsoft Teams and Cisco’s Webex have added noise cancellation software and started offering live transcription in video calls. Moreover, to accommodate its governmental customers, Webex even added a new feature that allows legislators to emulate voting on laws.

Nonetheless, Zoom still has plenty of enterprise users and its growing popularity among small businesses is expected to be a key differentiator in 2021.

Markedly, the Zacks Consensus Estimate for Zoom’s fiscal 2021 earnings has moved up 14.5% to $2.85 per share over the past 30 days.

Moreover, Amazon’s cloud arm AWS expanded its partnership with Zoom on Nov 30. Per the deal, Zoom will continue to leverage AWS’ global infrastructure and other machine learning, analytics, compute, storage, content distribution as well as security services to create a secure extension of its data centers.

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