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This copy is for your personal, non-commercial use only. Zoom Video Communications shares have been drifting lower since the collapse late last month of its proposed acquisition of the call-center software provider Five9. Stifel analyst J. Parker Lane picked up coverage of Zoom ticker: ZM from another analyst at the firm, keeping a Hold rating on the stock, while setting Distribution and use of this material are governed by our Subscriber Agreement and by copyright law.

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Zoom stock just crashed — here’s the simplest reason why – Why is Zoom stock going down?


Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources , and more. Learn More. The online meetings specialist’s red-hot trajectory in turned sour this year. ZM data by YCharts. Zoom’s November pain started in the first week of the month. Pharmaceuticals giant Pfizer presented strong results from trials of an anti-coronavirus pill, driving many stocks sharply higher as investors saw a quicker end to the global health crisis.

The same idea undermined Zoom’s business prospects as the need for remote video meetings should fade out as workers go back to their office desks. The stock took another big hit two weeks later, making a This time, the culprit was a solid earnings report with hints of worse news to come. That type of modest surprise would normally be enough to support even a surging stock price. Not this time, and here’s why:.

The business boost that Zoom enjoyed at the height of the pandemic is clearly fading away, with or without Pfizer’s new coronavirus treatment and other recent developments. That’s a scary prospect for many investors, especially if they picked up Zoom stock in the hope of scoring enormous short-term gains. The COVID boost may be going away but it also left a lasting imprint on Zoom’s reported results and shareholder returns.

Remember that disappointing one-year price chart at the top of this article? Let’s stretch it out to a two-year view instead and add one important financial metric:. Shareholders who got in before the pandemic have seen their investment triple in two years. In other words, Zoom Video’s business is much healthier than it might look in the context of year-over-year comparisons.

All things considered, Zoom could actually be a decent buy at today’s reasonable prices. Cost basis and return based on previous market day close. Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of Discounted offers are only available to new members.

Calculated by Time-Weighted Return since Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

Premium Services. Stock Advisor. View Our Services. Our Purpose:. Latest Stock Picks. Key Points. Today’s Change. Current Price. The poster child of pandemic-based winners is coming back down from that temporary high. That might actually be good news for some investors. Image source: Getty Images. Zoom Video Communications. Motley Fool Returns Market-beating stocks from our award-winning service.

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