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3 Reasons Why Zoom Has Earned Its Lofty Valuation


Zoom Video Communications (NASDAQ: ZM) has seen its stock more than double in 2020, reaching an all-time closing high of $151.70 in late March. The remote conferencing services company was only founded nine years ago but has since stepped into the big leagues, competing against the likes of Cisco's Webex and Microsoft's Skype.

Though many have pointed to Zoom's rich valuation as a reason why the stock's rise is unsustainable, the current COVID-19 pandemic presents a unique opportunity for the company to grow both its revenue and market share. The market may be pricing in significant future growth in demand for the company's services, while also projecting that videoconferencing may be a much larger part of doing business moving forward.

Here are three reasons why I believe Zoom's valuation is justified.

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Source Fool.com

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