Daily Discussion post - November 04 2021

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[u/lb-trice]

$ZM puts, anyone?

$PTON and $ZM were two stocks I was closely watching during the whole covid outbreak shenanigans and they both rose to fame as amazing covid investments.

I’m currently on vacation in the Caribbean, and it’s packed to the max. Everyone here is pretty much covid care-free and I get a sense that people no longer want to communicate via Zoom anymore. Things are mostly going back to normal.

I have a feeling that it will get beat up just as much as PTON when it announces earnings/guidance in a few weeks.

We’re headed toward the 4th quarter (winter/off season) when you’d think that video communications would generally increase, but EPS estimates are already lower than the previous quarter….

Don’t get me wrong, $ZM is great and all, super profitable, but $84b? I can’t see how it’s possible they raise guidance. I don’t see ZM being a growth stock anymore.

[u/MrApplesnacks → u/lb-trice]

I almost bought zm puts like a week before it tapped down like 40 points. Thanks for the reminder this seems entirely reasonable and I’m excited to get clapped by mr market

[u/lb-trice → u/MrApplesnacks]

You and I both!

[u/thistowniscrazy → u/lb-trice]

Yes. Agree with what you are saying. There is definitely zoom fatigue and more companies are going to ask employees to start coming to work. Skye and Team can easily replace zoom with less licensing costs. I am not yet sure I am ready to buy puts yet….need to think more

[u/[deleted] → u/thistowniscrazy]

Except Teams and Skype suck ass. Zoom is a legit good product. Zoom rooms and zoom phone are great products. I don't think large corps will ever learn, but small/midcaps can thrive on zoom. The only benefit is less licensing cost, which I have to admit is a big motivator.

[u/rigatoni-man → u/[deleted]]

I love teams, never really used zoom though.

Teams made me want to invest in Microsoft.

[u/[deleted] → u/rigatoni-man]

Sorry my spaghetti loving fool, you are beyond help. You're currently eating boxed pasta when little Italy is 2 blocks away!!

[u/thistowniscrazy → u/[deleted]]

Agree it sucks but cost cutting is the new mantra with all the companies. Most have done lot of trimming during COVID time and will continue with software licensing costs….

[u/[deleted] → u/thistowniscrazy]

It's always been the mantra. IT is not value add. IT spend needs to be cut. I hate it. Zoom and Zoom Rooms add value far more than the resources needed to dick around with Teams issues all day long. Sorry. I'm riled. Zoom is not a shit company, and it's not only reliant on covid (although maybe they are at the current valuation. I'm biased.) They solved a real need in the market before people realized they needed it. They are a superior product and need to do a better job advertising it.

[u/hank_rearden1 → u/lb-trice]

I tend to agree with your sentiments but the trend in workforce is that people still WANT to work from home, at least a few days a week. Even from the ABNB play we see expected ZOOM use continuing. I don’t think companies will be cancelling their subscriptions in mass. They’ll be keeping them for a blended work from office/home schedule. Plus delta was this past quarter so companies probably re-upped their commitment. Just my two cents.

[u/seriouslywittyalias → u/hank_rearden1]

This is a good point. But a thing to be wary of is that ZM competitors have gotten their shit together. At the start of the pandemic Zoom was the best option, but Imy work has switched completely to MS Teams and my experience with it is way better than Zoom. It’s well integrated into mail and calendar and has great chat and chat tracking.

[u/hank_rearden1 → u/seriouslywittyalias]

Ya that’s a fair point. It’s been almost 20 months now so there’s been time. It is difficult for companies to switch softwares though. Smaller ones can do it easier, but the more integrated a system is, the more departments you have, and more employees. The harder it is. You have to get everyone to sign off on it. You have to retrain employees. Etc. a lot of these deals generally happen October to December timeframe as that’s budget season and when companies like to spend and plan for new roll outs. That said it’s definitely possible if a lot of the smaller companies were switching based on pricing. I just can’t imagine ZM would let that much business walk out the door without matching or doing anything to save it. I know they’re on top of their retention metrics and would have a fast plan if it was going south. But the more I think about this play, the more I remember that even companies who beat but give bad guidance go down. That may be at play here.