Shares are down 38% since the beginning of the year. In the last 12 months, it’s already down 68%. So it looks like Zoom is one of the companies that was attractive to investors during the covid pandemic, and lost its hype after it was released.
However, Cathie Wood sees huge potential
Cathie Wood’s Ark Invest is known for its progressive, risk-taking investing, accompanied for many by overly exaggerated predictions. Her biggest bets on stocks like Tesla and subsequent predictions on the stock’s price have been the subject of much controversy. She now sees great potential for Zoom stock in the not-too-distant future.
The team at ARK Investments has issued a report predicting that Zoom Video Communications stock could see tremendous appreciation.
“According to ARK’s open-source research and model, Zoom’s stock price could approach $1,500 in 2026 with 76% annual growth.”
Given that Zoom stock is now trading at $110 apiece, this forecast implies a potential upside of 1,263%.
Home offices still haven’t disappeared
Even though in most of the world, the covid pandemic has abated and there is no longer a need for major restrictions and movement bans. So many companies and employees have discovered some advantages in the home office and so many companies remain in a mode where they combine both office and home working.
Read also: AT&T and Verizon postpone the use of some 5G bands
Thus, the interest in services like Zoom has cooled slightly, but ARK does not think that this hybrid working environment will disappear in the future. On the contrary, it predicts an increase in this type of work and its adoption by more companies.
So what are the predictions?
By 2026, 75% of global knowledge workers are predicted to work remotely or hybrid whereas last year it was 51%.
“Our mean projection assumes that the majority of Zoom’s users are enterprise customers and that 50% of the total Zoom user base is paying by 2026.”
Based on this, the company expects a share price of $1,500. Further, the probability of a bearish scenario is calculated, and thus with a 25% probability, the stock should be worth $700 in 2026. Under the bullish scenario, with a 25% probability, the stock will cost $2,000.
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