On Friday, November 26, shares of Zoom Video Communications Inc. (NASDAQ: ZM), a producer of video conferencing communications platforms, jumped more than 5.7 percent on reports of a new coronavirus strain. The ZM stock closes at $220.21.
The World Health Organization (WHO) has classified the new coronavirus strain (named “omicron”) as “of concern.” This means that it’s expected that this strain will spread swiftly and will be resistant to existing vaccinations. Indeed, this indicates the possibility of a new lockdown, at least on a local level.
Some countries have already imposed restrictions on flights to South Africa, where a new strain of the virus has been detected, while others have closed their borders to all travelers.
The possibility of a fresh shutdown prompted a sell-off in stocks connected to the economy’s recovery. The emphasis was once again on “pandemic” responses. Zoom Video Communications is one of the latter, offering teleworking and distance learning possibilities.
Remember that during the initial wave of the COVID-19 epidemic in March and April 2020, Zoom Video Communications flourished quickly, but growth has slowed in recent months as the economy recovers and employees return to work.
Despite the decrease in growth, Zoom Video Communications’ revenue climbed by 35% year over year in the third quarter of the fiscal year 2022. (up more than 360 percent a year earlier ).
Even if the limitations reappear, Zoom Video Communications’ growth rate is unlikely to be as high as it was in 2020. However, it will still assist the corporation in exceeding expectations in terms of sales and profitability.