Zoom's shares fell by 15% on Tuesday, closing at their lowest level since June 2020. This follows third-quarter results showing a slowdown in growth as people return to in-person interactions. The losses have wiped out nearly $100 billion from Zoom's market value since its peak in October 2020, reflecting a 64% decline in the stock. Despite the drop, the stock is still up about 500% since its launch in 2019.
As Zoom benefited from the pandemic and struggles with the return to normal life, shares of Peloton, a home exercise company, and Teladoc, a virtual healthcare provider, have faced similar challenges, with Teladoc's shares falling to levels seen in February 2020. Furthermore, analysts believe that these companies are just beginning to face difficult days, as growth-focused companies are hurt by rising bond yields. This impacts the discounted cash flow model used in evaluations, leading to larger discount rates and consequently lower valuations for these stocks.
However, some analysts expect Zoom to rebound, especially after recent declines have brought the company to a valuation of 13 times future sales—cheaper than many of its fast-growing tech counterparts.
