Stifel sees Zoom growth with Phone as a reminder of "powerful" enterprise opportunity
Zoom Video (ZM) is expected to report fourth quarter results after market close on Monday, March 1, with a conference call scheduled for 5:00 pm ET. What to watch for:
1. OUTLOOK: During the company's last earnings conference call, Zoom Video said it sees fourth quarter earnings per share between 77c-79c and revenue of $806M-$811M, with consensus at 66c and $730.11M, respectively. The company also raised its fiscal year 2021 earnings per share view to $2.87-$2.97 from $2.40-$2.47, with consensus at $2.55, and its revenue view to $2.575B-$2.58B from $2.37B-$2.39B, with consensus at $2.41B.
2. ZOOM PHONE: Back in January, Zoom Video announced that it had sold one million Zoom Phone seats shortly before it reached the two-year anniversary of the product's general availability. Meanwhile on Monday, Lumen (LUMN) said in a blog post that, "In November 2020, the companies launched Zoom delivered by Lumen with Zoom Meetings capability. Today, we are launching our latest capability within Zoom delivered by Lumen: Zoom Phone. Zoom Phone is rich with features. It is a cloud phone system that allows coworkers to talk and interact in new ways, keeping businesses moving. Zoom Phone gives customers the ability to migrate on-premises calling systems to a more scalable and reliable cloud platform which also includes Zoom Meetings, Chat, Rooms and Webinar capabilities. Simply put, Zoom Phone is the perfect solution to make sure you can talk to your colleagues from Napa to Nairobi with the same ease."
Commenting on the 1M total seats milestone, Stifel analyst Tom Roderick said it should be a reminder of "the powerful addressable opportunity in the enterprise for Zoom." The analyst also noted at the time that Zoom was participating in its biggest offering since 2019 after which it will have nearly $3.5B in cash and marketable securities that will be beneficial for an aggressive infrastructure build-out. Roderick added, however, that level of cash alone "doesn't necessarily put potential targets like RingCentral (RNG) or Twilio (TWLO) on the table without a huge component of stock in such a deal."
3. PUSH INTO MAIL: After media reports said Zoom Video was working on an email solution, DA Davidson analyst Rishi Jaluria said the move makes sense, given the convergence of workplace communication tools. The analyst likes that Zoom is "proactively investing in new growth opportunities instead of being complacent with the record growth it is seeing now." Zoom remains one of his favorite names heading into 2021.