Zoom stock falls 84% from 2020 highs

Zoom‘s share price peaked at $559 in 2020 as the pandemic bit. Fast forward to today and the situation has eased somewhat. Zoom‘s share price has tumbled to $84.69, an 84% decline according to a MoneyTransfers.com analysis.

“The decline of Zoom‘s share price has been nothing short of spectacular, but not unexpected at all,” says MoneyTransfers.com’s CEO Jonathan Merry. He adds, “The market got crowded, directing some significant interest to alternative apps. That was bound to impact its market performance. But the most critical contributor to the decline has been a resumption of pre-pandemic lifestyles. Most countries have allowed in-person meetings and learning, relegating virtual meetings to the back burner.”

Microsoft and Google are eating into Zoom‘s share

Zoom has been ceding ground to Microsoft and Google. Microsoft particularly has made a dent in the former’s market share through its Teams platform. By July 2020, Teams was reporting 250M monthly users, up from 10M in 2019.

Teams owes its growth to Microsoft merging its video conferencing unit with its Microsoft 365 applications. That move created one product with broad functionality, unlike Zoom. Microsoft’s CEO Satya Nadella has described Teams as the only solution for securely merging calls, meetings, chat, business process workflow, and content collaboration.

Teams’ focus is also giving it an advantage over Zoom. Whereas the former targets organizations only, the latter serves both individuals and businesses. Microsoft’s focus on organizations gives it a more sustainable client base.

That said, Zoom remains a formidable player within the videoconferencing sphere. It has a healthy balance sheet and robust revenue stream.

What does the future hold for the videoconferencing sector?

Organizations are adopting either work from home set up or a mix with office working. As such, virtual conferencing software will remain crucial for them. Research indicates that many are looking to increase their budgets in the area.

Zoom and other such services will register dips in users as the world contains the pandemic. However, their usage won’t go lower than pre-pandemic levels.