Zoom's Business Has 1 Glaring Issue
Zoom Video Communications (NASDAQ: ZM) was one of the hottest stocks during the early stages of the pandemic as its videoconferencing software made remote work and social distancing a whole lot easier. Now, however, amid a return to normal in the economy, the stock has struggled badly. It is down 76% over the past year (the S&P 500 has fallen by just 11% over that stretch), and it has given back all of its gains, once again trading at where it was in early 2020.
It might be tempting to buy the stock near its 52-week low, but investors should consider a serious risk before doing so.
A moat is a defensible competitive advantage that allows a business to perform well and keep its investors from taking away too much market share. Zoom is a great example of a business without much moat.
Source Fool.com
