In all likelihood, most of those free users won’t turn into paying customers. So it’s very early to tell whether that’s going to convert long-term into paying customers.” The big number Zoom bulls have been quoting over the past few weeks is the huge uptick in daily active users of Zoom from 10 million at the end of 2019, to 200 million in March.īut, as the company’s CFO said on the fourth quarter conference call: “ lot of that is on the free side. As such, I think the stock actually has tremendous downside potential from current levels. Zoom stock - already wildly overvalued in an “everything goes right” scenario - is not priced for any of these aforementioned headwinds.
Privacy and safety concerns are front-and-center, and could stall out the uptick in paid customer growth.Amid the surge in free demand, customer support and user experience for paying customers has dropped substantially, forcing some customer churn.The recent demand surge is mostly from free users, with management’s own guide implying that paid customer growth is much less robust.Zoom stock is NOT a buy at current levels. The answer to the second question is not. The answer to the first question is a bit complex. 1 question clients, friends and family have asked me over the past few weeks: when should we start buying stocks? The No. Still, that’s up 80% from pre-coronavirus levels.Īll this hype has attracted a lot of retail investor attention. Shares have since come crashing down on a plethora of privacy, safety and customer support issues.
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