Actions of Zoom Video Communications (NASDAQ: ZM) retreated on Wednesday along with some other popular work at home actions. They performed well in early 2020 due to unprecedented growth, but investors are unsure whether these gains will remain in the new year. As of 12:45 pm EST, Zoom’s stock dropped nearly 6%. However, while Wall Street wonders about the company’s future, Zoom is clearly not resting on its laurels, as today’s report demonstrates.
According to the digital news site The Information, Zoom is trying to stop commercial emails in the same way that it interrupted business meetings. When the company went public, it talked about how its video platform was only part of the overall communications and collaboration market. Experimenting with email and, supposedly, also with calendar software, Zoom appears to be focused on expanding its focus to the entire communication and collaboration market in which it operates.
Before you get too excited, consider that Zoom is still in the early stages of product development. However, it may not take long to start listening to the company’s plans. Trials with selected customers can begin next year.
I can certainly appreciate any investor apprehension about Zoom’s shares. It has already returned a lot – almost 500% in 2020. And it is trading at a price-to-sales ratio of 56. However, while there is nothing wrong with questioning Zoom’s future returns, investors should make sure that they don’t too quick to dismiss the prospects of the major companies entirely.
As this news from Zoom demonstrates, winning companies have a knack for expanding their market opportunities when investors least expect it. Zoom was a big winner in 2020, partly due to the relentless focus on customer service. Now, armed with his unexpected pandemic profits, he is well capitalized as he prepares for his second act.