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Zoom Video (ZM) Announces Intention to Acquire Workvivo

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Zoom Video Communications (ZM - Free Report) recently announced that it is set to acquire Workvivo. This would extend its platform and offer new features to its customers to keep employees engaged, connected and informed.

In the past two years, workforces have looked a lot different. Employers now need to think differently to attract and retain top talents. The workforce is different and hybrid now. People work from remote locations, an office, home or retail floors.

70% of the U.S. employees are front-line workers. These people want to feel connected to their leaders and colleagues while working. Engaging employees is very important to drive culture through an organization.

Workvivo, founded in 2017, is an employee experience platform, which provides engagement tools, social intranet and an employee application in one hub. Workvivo has achieved triple-digit growth in the last three years.

As soon as the deal is complete, Zoom plans to make Workvivo’s features available on its platform. The entire Workvivo team will work toward providing the best employee experience and drive employee experience innovation strategy. The deal is set to be completed in the first quarter of 2024.

Acquisition of Workvivo to Boost the Top Line

This Zacks Rank #3 (Hold) company is looking to boost its top line with the acquisition of Workvivo.

The Zacks Consensus Estimate for ZM’s first-quarter 2024 earnings is pegged at a profit of 99 cents per share, indicating a year-over-year decline of 3.88%. The Zacks Consensus Estimate for revenues is pegged at $4.44 billion, indicating year-over-year growth of 1.18%.

Shares of Zoom Video Communications have decreased 34.3% in the past year compared with the Zacks Computer and Technology sector’s decline of 6.7% in the same period.

Zoom’s acquisition of Workvivo would mark its entry in the employee engagement industry. It would also make Meta Platform’s (META - Free Report) Workplace, Microsoft’s (MSFT - Free Report) Yammer and Salesforce’s (CRM - Free Report) Simpplr its direct competitors.

Workplace is an online collaborative software tool with the aim of converting a company into a community. It facilitates video conferencing, news sharing, instant messaging and online groupwork.

Yammer is an enterprise social network tool. It can be integrated with Teams and other Microsoft 365 applications. It is primarily used for communications within the organization but can also be used to network across organizations.

Simpplr is an AI-powered employee experience and internal communications platform. Organizations use this tool to create personalized tools to engage and inspire the employees. It helps in attracting and retaining top talent in the industry.

In the first quarter of financial year 2024, the company expects growth in revenues of approximately 1% year over year. This growth can be boosted by its acquisition of Workvivo.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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