Better Bear Market Buy: Zoom vs. DocuSign
Zoom Video Communications (NASDAQ: ZM) and DocuSign (NASDAQ: DOCU) were two high-flying darlings of the "pandemic-stock" era. However, each stock has seen dramatic valuation pullbacks now that business tailwinds have eased and investors have adopted more cautious positions when it comes to growth-dependent companies. On the heels of big sell-offs, which beaten-down stock looks like the better buy? Read on to see why these two Motley Fool contributors don't agree.
Keith Noonan: Zoom was a stock market darling when social-distancing and shelter-in-place conditions drove a surging demand for its services. However, the company's share price has seen a dramatic pullback now that those tailwinds have lessened and investors have fled from growth stocks due to inflation, rising interest rates, and other pressures. The stock now trades down roughly 80% from its high.
The company is facing changing sales composition and challenging comparisons now that many of the pandemic-related catalysts that helped drive incredible growth have evaporated. Despite underwhelming performance for the company's consumer segment, Zoom's revenue climbed 12% year over year to reach roughly $1.07 billion in the first quarter thanks to a 31% sales increase from the enterprise segment.
Source Fool.com
