In a study last year, people who were face-to-face responded to yes/no questions in 297 milliseconds, on average, while those on Zoom chats took 976 milliseconds. Everyone is accounted for, but no one feels present. You overlap and interrupt the person you're talking to, and they don't seem to be listening. No matter how good your internet connection is, the personal connection rarely clicks. Zoom sucks, right? If you've spent any time on it - or any other video-chat app - you've probably felt it. Further, Microsoft has deep pockets to invest in its popular Teams platform, which fits very well into its suite of office products.Account icon An icon in the shape of a person's head and shoulders. Indeed, Microsoft Teams Mesh is a digital office environment that could be difficult to top. Though Zoom has held its own well against the tech behemoth's offering, Microsoft may have the edge when it comes to a shift into the metaverse. Microsoft Teams is a top competitor of Zoom. However, it's hard to tell just how 'sticky' such users are, as companies like Apple, Microsoft ( MSFT), and Alphabet ( GOOGL) set their sights on taking share in the world of video conferencing. Zoom has a brilliant platform and many loyal enterprise users that it can upsell. A firm like Zoom still has plenty to invest, but I think it's safe to say that size is a larger advantage when credit isn't so easy. With its massive share buybacks, the company has so much cash that it can do nearly anything it desires, including disrupting parallel markets. As interest rates rise, the odds are likely to be tilted towards the disruptive tech behemoths (think the FAANG stocks) and away from smaller, albeit still large, firms like Zoom.Ī company like Apple ( AAPL) is rich with cash. Indeed, wide moats are needed to stave off competition. While Zoom has done a great job of expanding its lineup beyond just its flagship video service (think Zoom Phone and Zoom Rooms), I don't view Zoom as having any products with a moat. However, Zoom's competitors are pretty scary and could pressure its margins over the coming years. Now, Zoom may still be a best-in-breed platform for various remote, hybrid, and even on-site workforces. Zoom's Video-Conferencing Rivals Could Get Stronger as Rates Rise This means that the stock is not very likely to outperform the overall market, according to this metric. Interestingly, Zoom has a 5 out of 10 Smart Score rating on TipRanks, also implying a 'neutral' rating. Therefore, I am neutral on ZM stock due to valuation and competition concerns. Investors got way too euphoric with the name, and despite the magnitude of the decline, shares aren't exactly a bargain at over 24 times trailing earnings. While remote and hybrid work is likely here to stay, it's clear that the valuation compression in ZM stock was needed.

Zoom Video stock is a prime example of why it's dangerous to chase high-momentum stocks or get too euphoric on trends.

Zoom video stock