Back to top

Image: Bigstock

The Zacks Analyst Blog Highlights: Zoom, Five9, Cisco and Microsoft

Read MoreHide Full Article

For Immediate Release

Chicago, IL – July 20, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Zoom Video Communications, Inc. (ZM - Free Report) , Five9, Inc. (FIVN - Free Report) , Cisco Systems, Inc. (CSCO - Free Report) and Microsoft Corporation (MSFT - Free Report) ).

Here are highlights from Monday’s Analyst Blog:

Zoom Video (ZM - Free Report) to Buy Call Center Software Provider Five9

Zoom Video Communications recently entered into a definitive agreement to acquire Five9, a provider of the intelligent cloud contact center, in a deal worth nearly $14.7 billion to target business clients looking to boost customer engagement.

Expected to close in the first half of calendar year 2022, the deal will give Zoom access to the $24 billion global contact center market. It will combine Five9’s Contact Center as a Service (CCaaS) solution with Zoom’s broad communications platform.

Per Grand View research report, the global CCaaS market is expected to grow at a CAGR of 15.7% from 2021 to 2028.

Zoom’s deal with Five9, which offers services to call centers via cloud computing, will help expand the company’s Zoom Phone offering. While Zoom is predominantly known for its video conferencing services, it has been promoting various office collaboration products including Zoom Phone, a cloud phone system, and its conference software, Zoom Rooms.

The all-stock transaction values Five9 shares at $200.28 with shareholders in the company set to receive 0.5533 shares of Zoom class A common stock and is subject to approval by Five9 stockholders. Goldman Sachs & Co. LLC is serving as exclusive financial advisor and Cooley LLP is serving as legal counsel to Zoom.

We believe Zoom’s ability to generate strong cash flows will enable it to make further investments in product development and acquisitions in the future. This Zacks Rank #1 (Strong Buy) company has cash and cash equivalents (including marketable securities) worth $4.7 billion as of Apr 30, 2021. You can see the complete list of today’s Zacks #1 Rank stocks here.

User Growth, Portfolio Strength to Fend off Competition

Zoom shares have returned 7.3% in the year-to-date period against the Zacks Internet - Software industry’s decline of 6.7% as conferencing platforms, which also include Cisco’s Webex and Microsoft Teams, have seen a surge in usage due to the coronavirus-induced shift to online working, learning and socializing.

Zoom has been benefiting from an expanding enterprise customer base backed by its cloud-native unified communications platform. Its solutions combine video, audio, phone, screen sharing and chat functionalities and make remote-working and collaboration easy.

Zoom is one of the leading names in the unified communications and collaboration (UC&C) space, which is expected to witness a healthy CAGR of 27.8% during 2021-2026, per Mordor Intelligence report.

User addition and portfolio expansion are being hailed as key catalysts for Zoom to continue on its growth trajectory in 2021. At the end of the fiscal first quarter of 2022, Zoom had roughly 497,100 customers (with more than 10 employees), up 87% year over year.

The company had 1,999 customers with more than $100,000 in trailing 12-month revenues, up roughly 160% year over year.

Demand for Zoom Video’s platform and expanding suite of solutions are expected to remain robust and aid the company’s top-line growth in the near term.

Moreover, a strong partner base that includes the likes of Atlassian, ServiceNow and Dropbox is expected to benefit the company in winning enterprise customers.

The availability of Zoom For Home, which supports remote working for business professionals, has been a key catalyst.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                                      

https://www.zacks.com                                          

 

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.