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What Does Zoom Offer Investors?

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Investors get another handle in the $20 billion video conferencing market

Zoom Video Communications (ZM) went public in April, and its shares soared more than 70% on its first day of trading even after it raised its IPO price several times and eventually priced its IPO above the planned range.

Zoom provides a cloud-based video chat service aimed at companies. Its software is used by companies to conduct video conferences and online meetings. For investors, Zoom offers another handle in the lucrative video conferencing market. The global video conferencing market was valued at $11 billion in 2017, and it’s poised to exceed $20 billion by 2024, according to a report by Global Market Insights.

Zoom is battling tech giants for market share

In its IPO filing, Zoom cited Cisco Systems (CSCO), Microsoft (MSFT), LogMeIn (LOGM), and Google (GOOGL) as its top competitors in the market for video conferencing services aimed at business customers. Cisco and Microsoft offer business video chat services under the Webex and Skype brands, respectively. LogMeIn is a provider of workplace collaboration tools, including an online meeting software service. Google runs a video chat service called Hangouts. According to a report from Recode, Microsoft made multiple attempts to acquire Zoom before it went public.

Zoom also thinks Facebook (FB) and Amazon (AMZN) may someday give it competition in the video conferencing service market.

Zoom made a $7.6 million profit

Zoom priced its IPO at $36 per share, above its upgraded range of $33–$35. The company had initially priced its IPO in the range of $28–$32.

Zoom is profitable, making it a rare breed among the Silicon Valley startups that have gone public this year. Zoom made a profit of $7.6 million in fiscal 2019, which ended in January. It saw a loss of $3.5 million in fiscal 2018.

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