A new strain of coronavirus has supported the growth of Zoom Video Communications
The developer of the video conferencing communication platform Zoom Video Communications Inc. (ZM) rose by more than 5.7% on Friday, November 26, on the news of identifying a new strain of coronavirus. ZM stock ended trading at $220.21.
A new strain of coronavirus (called “omicron”) has by the World Health Organization (WHO) as a “concern.” That is that this strain can spread quickly and be more resistant to existing vaccines.
In particular, some countries restrict flights to South Africa, where a new variant of the virus, and some countries are closing their borders to everyone.
The probability of a new lockdown led to stock sales, which were associated with the economic recovery. However, the focus of attention was again on “pandemic” actions. Among the latter is Zoom Video Communications, which provides the possibility of remote work and distance learning; if restrictions on social activity return, the company’s platform will become more popular again.
Recall that Zoom Video Communications grew rapidly during the first wave of the COVID-19 pandemic in March and April 2020. Still, in recent months, as the economy recovered and workers returned to offices, the company’s growth slowed down.
However, despite the slow growth, in the third quarter of 2022, Zoom Video Communications revenue increased by 35% year-on-year (a year earlier, the development was more than 360%). So, most likely, even if restrictions return, the growth rate of Zoom Video Communications will not be as impressive as in 2020. However, it will still help the company to increase revenue and profit more than expected.
