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2021-06-06

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Zoom: Zooming In, Not Connecting<blockquote>缩放：放大，而不是连接</blockquote>

Summary After a ridiculous 2020, Zoom previously guided for flattish sequential trends in 2021. The

Zoom: Zooming In, Not Connecting<blockquote>缩放：放大，而不是连接</blockquote>

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{"i18n":{"language":"zh_CN"},"data":{"magic":2,"id":115377146,"tweetId":"115377146","gmtCreate":1622955249585,"gmtModify":1634096600003,"author":{"id":3586041656196434,"idStr":"3586041656196434","authorId":3586041656196434,"authorIdStr":"3586041656196434","name":"FooFT","avatar":"https://static.tigerbbs.com/0587959c560ac38e1203f60d69f769ee","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":0,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>[Smile]&nbsp; </body></html>","htmlText":"<html><head></head><body>[Smile]&nbsp; </body></html>","text":"[Smile]","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/115377146","repostId":1125022737,"repostType":4,"repost":{"id":"1125022737","kind":"news","pubTimestamp":1622940244,"share":"https://www.laohu8.com/m/news/1125022737?lang=zh_CN&edition=full","pubTime":"2021-06-06 08:44","market":"us","language":"en","title":"Zoom: Zooming In, Not Connecting<blockquote>缩放：放大，而不是连接</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1125022737","media":"seekingalpha","summary":"Summary\n\nAfter a ridiculous 2020, Zoom previously guided for flattish sequential trends in 2021.\nThe","content":"Summary<blockquote>总结</blockquote> <ul> <li>After a ridiculous 2020, Zoom previously guided for flattish sequential trends in 2021.</li> <li>The first quarter has actually been surprisingly strong as the company hiked the full-year guidance as well.</li> <li>Despite this positive news flow, I am very worried about potential lack of year-over-year growth later this year at a 25 times sales multiple.</li> </ul> <img src=\"https://static.tigerbbs.com/1007baa781199b5fa7dfab51294d0e11\" tg-width=\"1536\" tg-height=\"1024\">Photo by Sundry Photography/iStock Editorial via Getty Images<blockquote><ul><li>在经历了荒谬的2020年之后，Zoom此前预计2021年的连续趋势将持平。</li><li>第一季度实际上出人意料地强劲，因为该公司也上调了全年指引。</li><li>尽管有这些积极的消息，但我非常担心今年晚些时候销售额可能无法实现25倍的同比增长。</li></ul>摄影：Sundry Photography/iStock社论来自Getty Images</blockquote> Zoom Video Communications (ZM)&nbsp;started 2021 on a very strong note but its shares have seen continued pressure during the tech sell-off in recent months.<blockquote>Zoom Video通信(ZM)2021年伊始表现非常强劲，但近几个月来，在科技股抛售期间，其股价持续承受压力。</blockquote> In April of this year, I&nbsp;concluded&nbsp;that Zoom ended 2020 on a solid note, yet I was still not connecting to the shares as the 2021 guidance was largely in line with the fourth quarter run rate, leaving little to no sequential growth.<blockquote>今年4月，我得出的结论是，Zoom在2020年结束时表现稳健，但我仍然没有与股票挂钩，因为2021年的指引与第四季度的运行率基本一致，几乎没有环比增长。</blockquote> Furthermore, the revenues to be realized in the future depend heavily on the outcome of the pandemic. As we have seen good news on that front of course recently, that is a bad outcome for Zoom (at least in the near term). While the company is off to a good start in 2021, the potential for sales declines on a year-over-year basis later this year makes me frightened at a huge 25 times sales multiple.<blockquote>此外，未来实现的收入在很大程度上取决于疫情的结果。当然，正如我们最近在这方面看到的好消息一样，这对Zoom来说是一个糟糕的结果（至少在短期内）。虽然该公司在2021年有了一个良好的开端，但今年晚些时候销售额同比下降的可能性让我对25倍的巨大销售额倍数感到害怕。</blockquote> My April Take<blockquote>我的四月拍摄</blockquote> Zoom is one of the undisputed beneficiaries of the Covid-19 pandemic, as the operating momentum was unheard of. That rapid growth is clearly reliant on the pandemic which creates a key risk as well, as in my opinion the outlook is largely binary, related to the potential reopening of the economies across the globe.<blockquote>Zoom是Covid-19大流行无可争议的受益者之一，因为其运营势头闻所未闻。这种快速增长显然依赖于疫情，这也造成了一个关键风险，因为在我看来，前景在很大程度上是二元的，与全球经济的潜在重新开放有关。</blockquote> That is not entirely fair as well, as the binary outcome does not mean that we return to a pre-Covid-19 world either, because even if the pandemic comes to an end, demand will in all likelihood come in (far) above the run rate reported ahead of the pandemic.<blockquote>这也不完全公平，因为二元结果也不意味着我们回到了新冠肺炎之前的世界，因为即使疫情结束，需求也很可能会（远远）高于疫情之前报告的运行率。</blockquote> The thesis started with 2019, a year in which the company grew sales by 88% to $623 million, and with shares trading at $60 ahead of the pandemic, valuations were elevated at around 20 times sales. Originally the company guided for 50% revenue growth in 2020, yet the pandemic changed everything. First quarter sales in 2020 jumped 169% as a result of the pandemic, triggering a doubling of the annual sales outlook.<blockquote>这篇论文始于2019年，这一年该公司销售额增长了88%，达到6.23亿美元，在疫情爆发前股价为60美元，估值升至销售额的20倍左右。最初，该公司预计2020年收入增长50%，但疫情改变了一切。受疫情影响，2020年第一季度销售额猛增169%，引发年度销售前景翻倍。</blockquote> Second quarter sales were up 355% in the second quarter, 367% in the third quarter and growth even topped 369% in the fourth quarter. Fourth quarter revenues of $882 million were essentially equal to the original outlook for all of 2020, showing the real extent of the momentum!<blockquote>第二季度销售额第二季度增长355%，第三季度增长367%，第四季度增长甚至超过369%。第四季度收入为8.82亿美元，基本上等于最初对2020年全年的预期，显示了这一势头的真实程度！</blockquote> With sales running at a run rate of $3.5 billion, earnings were coming in around a billion a year as the great momentum triggered a huge run in the shares from $60 ahead of the pandemic, to a high of nearly $600 in October. Shares are now down to $330, as nearly half the gains have been given back. Working with a 300 million shares count at the time of the fourth quarter results, valued at $322 per share, the company was valued at $96 billion, for a $92 billion enterprise valuation.<blockquote>随着销售额以35亿美元的速度运行，每年的收益约为10亿美元，这一巨大势头引发了股价从疫情爆发前的60美元大幅上涨至10月份近600美元的高点。股价现已跌至330美元，近一半涨幅已回吐。第四季度业绩公布时，该公司共有3亿股股票，每股价值322美元，估值为960亿美元，而企业估值为920亿美元。</blockquote> This came down to 26 times annualized sales and 100 times earnings. While &gt;300% growth rates look compelling, comparables from now on will get difficult, but moreover is the uncertainty on the outcome of the pandemic, and thus the demand for Zoom's products, as well as potential about becoming a commodity like product and competition from Teams, among others.<blockquote>这相当于年销售额的26倍和收益的100倍。虽然超过300%的增长率看起来令人信服，但从现在开始进行比较将变得困难，但此外，大流行结果的不确定性，以及对Zoom产品的需求，以及成为类似产品和竞争的商品的潜力来自团队等。</blockquote> With the company guiding for first quarter 2021 sales of $900-$905 million and full year sales of $3.77 billion for 2021, it was evident to me that sequential growth would be coming to a standstill as this did not rhyme with a 25 times sales multiple in my book. This was the key reason why I have not initiated a position yet despite the near 50% pullback seen in the share price.<blockquote>该公司预计2021年第一季度销售额为900-9.05亿美元，2021年全年销售额为37.7亿美元，对我来说，环比增长显然将陷入停滞，因为这与我书中25倍的销售额倍数不符。这就是尽管股价回调近50%，但我尚未建仓的关键原因。</blockquote> Solid Start To 2021<blockquote>2021年开局良好</blockquote> Zoom&nbsp;started&nbsp;the year on a solid note with first quarter sales up 191% to $956 million. The percentage growth rates come down quite a bit already after the first quarter of last year already included a huge bump in sales, and with shares running at a $3.8 billion run rate, it is evident that the best of the growth is a thing of the past already. The company continues to be very profitable with after-tax earnings of $227 million resulting in nearly 25% after-tax profit margins, yet earnings only trend around $3 per share here.<blockquote>Zoom今年开局强劲，第一季度销售额增长191%，达到9.56亿美元。在去年第一季度销售额大幅增长之后，百分比增长率已经下降了不少，而且股价以38亿美元的价格运行，很明显，最好的增长已经成为过去了。该公司继续保持盈利能力，税后收益为2.27亿美元，税后利润率接近25%，但每股收益仅为3美元左右。</blockquote> A share count of 305 million shares now trade at $330 which implies an equity valuation just above the $100 billion mark, for an enterprise value of around $96 billion. Based on the current run rate of $3.8 billion in sales, the company trades at 25 times sales. On the back of the solid first quarter results, the company hiked the midpoint of the full year sales guidance to $3.98 billion, essentially a $210 million increase in the sales guidance. This suggests somewhat stronger momentum in the remainder of the year, despite the promising trends related to the pandemic. Even after the hike, shares still trade at 24 times sales.<blockquote>目前3.05亿股的交易价格为330美元，这意味着股权估值略高于1000亿美元大关，企业价值约为960亿美元。根据目前38亿美元销售额的运行率，该公司的交易价格是销售额的25倍。在第一季度业绩稳健的背景下，该公司将全年销售指引中点上调至39.8亿美元，实质上比销售指引增加了2.1亿美元。尽管与大流行相关的趋势充满希望，但这表明今年剩余时间的势头有所增强。即使在加息之后，股价仍是销售额的24倍。</blockquote> While the hike in the guidance for the entire year is comfortable, it still suggests that sequential revenue and earnings numbers are likely seen flattish from here onward, as I fear that in case of a big re-opening we might even see temporary negative growth numbers on a year-over-year basis. Those prospects frighten me with a current 24 times sales multiple attached to the business, and even as the business is very profitable, I am very scared on these prospects, meaning that I continue to stand on the sideline.<blockquote>虽然全年指引的上调令人欣慰，但这仍然表明，从现在开始，连续收入和盈利数据可能会持平，因为我担心，如果大规模重新开放，我们甚至可能会看到暂时的负增长同比数字。这些前景让我感到害怕，因为该业务目前的销售额是24倍，即使该业务非常有利可图，我也非常害怕这些前景，这意味着我继续袖手旁观。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Zoom: Zooming In, Not Connecting<blockquote>缩放：放大，而不是连接</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nZoom: Zooming In, Not Connecting<blockquote>缩放：放大，而不是连接</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nseekingalpha2021-06-06 08:44\n\n</h4>\n</header>\n<article>\nSummary<blockquote>总结</blockquote> <ul> <li>After a ridiculous 2020, Zoom previously guided for flattish sequential trends in 2021.</li> <li>The first quarter has actually been surprisingly strong as the company hiked the full-year guidance as well.</li> <li>Despite this positive news flow, I am very worried about potential lack of year-over-year growth later this year at a 25 times sales multiple.</li> </ul> <img src=\"https://static.tigerbbs.com/1007baa781199b5fa7dfab51294d0e11\" tg-width=\"1536\" tg-height=\"1024\">Photo by Sundry Photography/iStock Editorial via Getty Images<blockquote><ul><li>在经历了荒谬的2020年之后，Zoom此前预计2021年的连续趋势将持平。</li><li>第一季度实际上出人意料地强劲，因为该公司也上调了全年指引。</li><li>尽管有这些积极的消息，但我非常担心今年晚些时候销售额可能无法实现25倍的同比增长。</li></ul>摄影：Sundry Photography/iStock社论来自Getty Images</blockquote> Zoom Video Communications (ZM)&nbsp;started 2021 on a very strong note but its shares have seen continued pressure during the tech sell-off in recent months.<blockquote>Zoom Video通信(ZM)2021年伊始表现非常强劲，但近几个月来，在科技股抛售期间，其股价持续承受压力。</blockquote> In April of this year, I&nbsp;concluded&nbsp;that Zoom ended 2020 on a solid note, yet I was still not connecting to the shares as the 2021 guidance was largely in line with the fourth quarter run rate, leaving little to no sequential growth.<blockquote>今年4月，我得出的结论是，Zoom在2020年结束时表现稳健，但我仍然没有与股票挂钩，因为2021年的指引与第四季度的运行率基本一致，几乎没有环比增长。</blockquote> Furthermore, the revenues to be realized in the future depend heavily on the outcome of the pandemic. As we have seen good news on that front of course recently, that is a bad outcome for Zoom (at least in the near term). While the company is off to a good start in 2021, the potential for sales declines on a year-over-year basis later this year makes me frightened at a huge 25 times sales multiple.<blockquote>此外，未来实现的收入在很大程度上取决于疫情的结果。当然，正如我们最近在这方面看到的好消息一样，这对Zoom来说是一个糟糕的结果（至少在短期内）。虽然该公司在2021年有了一个良好的开端，但今年晚些时候销售额同比下降的可能性让我对25倍的巨大销售额倍数感到害怕。</blockquote> My April Take<blockquote>我的四月拍摄</blockquote> Zoom is one of the undisputed beneficiaries of the Covid-19 pandemic, as the operating momentum was unheard of. That rapid growth is clearly reliant on the pandemic which creates a key risk as well, as in my opinion the outlook is largely binary, related to the potential reopening of the economies across the globe.<blockquote>Zoom是Covid-19大流行无可争议的受益者之一，因为其运营势头闻所未闻。这种快速增长显然依赖于疫情，这也造成了一个关键风险，因为在我看来，前景在很大程度上是二元的，与全球经济的潜在重新开放有关。</blockquote> That is not entirely fair as well, as the binary outcome does not mean that we return to a pre-Covid-19 world either, because even if the pandemic comes to an end, demand will in all likelihood come in (far) above the run rate reported ahead of the pandemic.<blockquote>这也不完全公平，因为二元结果也不意味着我们回到了新冠肺炎之前的世界，因为即使疫情结束，需求也很可能会（远远）高于疫情之前报告的运行率。</blockquote> The thesis started with 2019, a year in which the company grew sales by 88% to $623 million, and with shares trading at $60 ahead of the pandemic, valuations were elevated at around 20 times sales. Originally the company guided for 50% revenue growth in 2020, yet the pandemic changed everything. First quarter sales in 2020 jumped 169% as a result of the pandemic, triggering a doubling of the annual sales outlook.<blockquote>这篇论文始于2019年，这一年该公司销售额增长了88%，达到6.23亿美元，在疫情爆发前股价为60美元，估值升至销售额的20倍左右。最初，该公司预计2020年收入增长50%，但疫情改变了一切。受疫情影响，2020年第一季度销售额猛增169%，引发年度销售前景翻倍。</blockquote> Second quarter sales were up 355% in the second quarter, 367% in the third quarter and growth even topped 369% in the fourth quarter. Fourth quarter revenues of $882 million were essentially equal to the original outlook for all of 2020, showing the real extent of the momentum!<blockquote>第二季度销售额第二季度增长355%，第三季度增长367%，第四季度增长甚至超过369%。第四季度收入为8.82亿美元，基本上等于最初对2020年全年的预期，显示了这一势头的真实程度！</blockquote> With sales running at a run rate of $3.5 billion, earnings were coming in around a billion a year as the great momentum triggered a huge run in the shares from $60 ahead of the pandemic, to a high of nearly $600 in October. Shares are now down to $330, as nearly half the gains have been given back. Working with a 300 million shares count at the time of the fourth quarter results, valued at $322 per share, the company was valued at $96 billion, for a $92 billion enterprise valuation.<blockquote>随着销售额以35亿美元的速度运行，每年的收益约为10亿美元，这一巨大势头引发了股价从疫情爆发前的60美元大幅上涨至10月份近600美元的高点。股价现已跌至330美元，近一半涨幅已回吐。第四季度业绩公布时，该公司共有3亿股股票，每股价值322美元，估值为960亿美元，而企业估值为920亿美元。</blockquote> This came down to 26 times annualized sales and 100 times earnings. While &gt;300% growth rates look compelling, comparables from now on will get difficult, but moreover is the uncertainty on the outcome of the pandemic, and thus the demand for Zoom's products, as well as potential about becoming a commodity like product and competition from Teams, among others.<blockquote>这相当于年销售额的26倍和收益的100倍。虽然超过300%的增长率看起来令人信服，但从现在开始进行比较将变得困难，但此外，大流行结果的不确定性，以及对Zoom产品的需求，以及成为类似产品和竞争的商品的潜力来自团队等。</blockquote> With the company guiding for first quarter 2021 sales of $900-$905 million and full year sales of $3.77 billion for 2021, it was evident to me that sequential growth would be coming to a standstill as this did not rhyme with a 25 times sales multiple in my book. This was the key reason why I have not initiated a position yet despite the near 50% pullback seen in the share price.<blockquote>该公司预计2021年第一季度销售额为900-9.05亿美元，2021年全年销售额为37.7亿美元，对我来说，环比增长显然将陷入停滞，因为这与我书中25倍的销售额倍数不符。这就是尽管股价回调近50%，但我尚未建仓的关键原因。</blockquote> Solid Start To 2021<blockquote>2021年开局良好</blockquote> Zoom&nbsp;started&nbsp;the year on a solid note with first quarter sales up 191% to $956 million. The percentage growth rates come down quite a bit already after the first quarter of last year already included a huge bump in sales, and with shares running at a $3.8 billion run rate, it is evident that the best of the growth is a thing of the past already. The company continues to be very profitable with after-tax earnings of $227 million resulting in nearly 25% after-tax profit margins, yet earnings only trend around $3 per share here.<blockquote>Zoom今年开局强劲，第一季度销售额增长191%，达到9.56亿美元。在去年第一季度销售额大幅增长之后，百分比增长率已经下降了不少，而且股价以38亿美元的价格运行，很明显，最好的增长已经成为过去了。该公司继续保持盈利能力，税后收益为2.27亿美元，税后利润率接近25%，但每股收益仅为3美元左右。</blockquote> A share count of 305 million shares now trade at $330 which implies an equity valuation just above the $100 billion mark, for an enterprise value of around $96 billion. Based on the current run rate of $3.8 billion in sales, the company trades at 25 times sales. On the back of the solid first quarter results, the company hiked the midpoint of the full year sales guidance to $3.98 billion, essentially a $210 million increase in the sales guidance. This suggests somewhat stronger momentum in the remainder of the year, despite the promising trends related to the pandemic. Even after the hike, shares still trade at 24 times sales.<blockquote>目前3.05亿股的交易价格为330美元，这意味着股权估值略高于1000亿美元大关，企业价值约为960亿美元。根据目前38亿美元销售额的运行率，该公司的交易价格是销售额的25倍。在第一季度业绩稳健的背景下，该公司将全年销售指引中点上调至39.8亿美元，实质上比销售指引增加了2.1亿美元。尽管与大流行相关的趋势充满希望，但这表明今年剩余时间的势头有所增强。即使在加息之后，股价仍是销售额的24倍。</blockquote> While the hike in the guidance for the entire year is comfortable, it still suggests that sequential revenue and earnings numbers are likely seen flattish from here onward, as I fear that in case of a big re-opening we might even see temporary negative growth numbers on a year-over-year basis. Those prospects frighten me with a current 24 times sales multiple attached to the business, and even as the business is very profitable, I am very scared on these prospects, meaning that I continue to stand on the sideline.<blockquote>虽然全年指引的上调令人欣慰，但这仍然表明，从现在开始，连续收入和盈利数据可能会持平，因为我担心，如果大规模重新开放，我们甚至可能会看到暂时的负增长同比数字。这些前景让我感到害怕，因为该业务目前的销售额是24倍，即使该业务非常有利可图，我也非常害怕这些前景，这意味着我继续袖手旁观。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://seekingalpha.com/article/4433258-zoom-zooming-in-not-connecting\">seekingalpha</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"ZM":"Zoom"},"source_url":"https://seekingalpha.com/article/4433258-zoom-zooming-in-not-connecting","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1125022737","content_text":"Summary\n\nAfter a ridiculous 2020, Zoom previously guided for flattish sequential trends in 2021.\nThe first quarter has actually been surprisingly strong as the company hiked the full-year guidance as well.\nDespite this positive news flow, I am very worried about potential lack of year-over-year growth later this year at a 25 times sales multiple.\n\nPhoto by Sundry Photography/iStock Editorial via Getty Images\nZoom Video Communications (ZM) started 2021 on a very strong note but its shares have seen continued pressure during the tech sell-off in recent months.\nIn April of this year, I concluded that Zoom ended 2020 on a solid note, yet I was still not connecting to the shares as the 2021 guidance was largely in line with the fourth quarter run rate, leaving little to no sequential growth.\nFurthermore, the revenues to be realized in the future depend heavily on the outcome of the pandemic. As we have seen good news on that front of course recently, that is a bad outcome for Zoom (at least in the near term). While the company is off to a good start in 2021, the potential for sales declines on a year-over-year basis later this year makes me frightened at a huge 25 times sales multiple.\nMy April Take\nZoom is one of the undisputed beneficiaries of the Covid-19 pandemic, as the operating momentum was unheard of. That rapid growth is clearly reliant on the pandemic which creates a key risk as well, as in my opinion the outlook is largely binary, related to the potential reopening of the economies across the globe.\nThat is not entirely fair as well, as the binary outcome does not mean that we return to a pre-Covid-19 world either, because even if the pandemic comes to an end, demand will in all likelihood come in (far) above the run rate reported ahead of the pandemic.\nThe thesis started with 2019, a year in which the company grew sales by 88% to $623 million, and with shares trading at $60 ahead of the pandemic, valuations were elevated at around 20 times sales. Originally the company guided for 50% revenue growth in 2020, yet the pandemic changed everything. First quarter sales in 2020 jumped 169% as a result of the pandemic, triggering a doubling of the annual sales outlook.\nSecond quarter sales were up 355% in the second quarter, 367% in the third quarter and growth even topped 369% in the fourth quarter. Fourth quarter revenues of $882 million were essentially equal to the original outlook for all of 2020, showing the real extent of the momentum!\nWith sales running at a run rate of $3.5 billion, earnings were coming in around a billion a year as the great momentum triggered a huge run in the shares from $60 ahead of the pandemic, to a high of nearly $600 in October. Shares are now down to $330, as nearly half the gains have been given back. Working with a 300 million shares count at the time of the fourth quarter results, valued at $322 per share, the company was valued at $96 billion, for a $92 billion enterprise valuation.\nThis came down to 26 times annualized sales and 100 times earnings. While >300% growth rates look compelling, comparables from now on will get difficult, but moreover is the uncertainty on the outcome of the pandemic, and thus the demand for Zoom's products, as well as potential about becoming a commodity like product and competition from Teams, among others.\nWith the company guiding for first quarter 2021 sales of $900-$905 million and full year sales of $3.77 billion for 2021, it was evident to me that sequential growth would be coming to a standstill as this did not rhyme with a 25 times sales multiple in my book. This was the key reason why I have not initiated a position yet despite the near 50% pullback seen in the share price.\nSolid Start To 2021\nZoom started the year on a solid note with first quarter sales up 191% to $956 million. The percentage growth rates come down quite a bit already after the first quarter of last year already included a huge bump in sales, and with shares running at a $3.8 billion run rate, it is evident that the best of the growth is a thing of the past already. The company continues to be very profitable with after-tax earnings of $227 million resulting in nearly 25% after-tax profit margins, yet earnings only trend around $3 per share here.\nA share count of 305 million shares now trade at $330 which implies an equity valuation just above the $100 billion mark, for an enterprise value of around $96 billion. Based on the current run rate of $3.8 billion in sales, the company trades at 25 times sales. On the back of the solid first quarter results, the company hiked the midpoint of the full year sales guidance to $3.98 billion, essentially a $210 million increase in the sales guidance. This suggests somewhat stronger momentum in the remainder of the year, despite the promising trends related to the pandemic. Even after the hike, shares still trade at 24 times sales.\nWhile the hike in the guidance for the entire year is comfortable, it still suggests that sequential revenue and earnings numbers are likely seen flattish from here onward, as I fear that in case of a big re-opening we might even see temporary negative growth numbers on a year-over-year basis. Those prospects frighten me with a current 24 times sales multiple attached to the business, and even as the business is very profitable, I am very scared on these prospects, meaning that I continue to stand on the sideline.","news_type":1,"symbols_score_info":{"ZM":0.9}},"isVote":1,"tweetType":1,"viewCount":404,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":7,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}