Zoom (ZM): I am not sure if I’ve ever seen such massive numbers reported, a huge earnings beat (compared to estimates), massive revenue growth of 367%, increased guidance for next quarter and yet a complete disappointment to the market…but that is what happens when the expectations and valuations get so high they are virtually impossible to sustain. Make no mistake, ZM is still growing like crazy and faster than any other company I know, but it is slowing down, lower margins, and no visibility to how they could possibly continue that growth (i.e. no new products coming on line, no guidance for possible OnZoom, or Zoom phone revenues, etc). I sold 1/2 of my position yesterday in the after hours market. Sold a little more today and will pause and see how things turn out today. Salesforce (CRM) is a benchmark for our SaaS companies and reports after hours today…hoping they can turn the battleship that is our SaaS stocks around today, as they are all seemingly selling off in the wake of ZM’s “disappointing” earnings…if you can call “367% revenue growth 130 DBNRR, in 45 countries, adding 63,000 customers, international expansion and adding over $100m+ in revenue in just the last 90 days” slowing down?? The market is always looking forward though…and the case is getting harder and harder to make without a 2nd act. On a humanitarian level, I think it is awesome they are literally donating their platform to the K-12 schools and many others, but on the pure financial level, that caused a big hit to their margins and to the revenue growth some were expecting. It’s a marathon folks…we take our stumbles through the race, get up and keep going. ZM stock down 15% today…basically where they were two short weeks ago. Cheers!
Investing in the Digital Revolution
