I was wondering if the stock price for ZM has varied proportionally to the frequency of the term “zoom” being searched via Google. So I did a quick search on Google Trends.
According to Google Trends,the search term “zoom” was queried 20 times more often in the U.S.A. at its peak in early March (after Covid news really broke), then it was queried prior to the initial Covid lockdowns. That is not surprising, of course. There are, however, 2 interesting points in the trends.
First, the frequency of searches for “zoom” went steadily down from early March until the beginning of July when they stabilized at roughly 5x the preCovid levels. The stock price has only increased roughly 3x during the same period.
Second, the frequency of “zoom” searches on Google began to increase again beginning around the 1st of August. (Maybe a return to the new academic year?) Searches for “zoom” are now more than 12x more frequent than before Covid lockdowns and steadily increasing. The stock price is still only about 3x higher than before Covid lockdowns.
These trends are also observable and similar for other related search terms such as “zoom video.” Similar Google search trends related to “zoom” are also recognizable in many other countries and even worldwide.
Could this portend greater revenue than expected? We shall soon see!
I don’t think any company bothers to guide to 240% revenue growth unless they are nearly 100% certain that they will beat it. Otherwise they’d just guide to 200% growth and still have the same effect.
While the prosumer category may not see the same bump that it did in the first quarter, I don’t think the churn will kick in until next year, assuming there is a vaccine or other reliable treatment. So I see no reason to doubt they will exceed their $500m guidance as some of the slower to adopt (or paranoid of security issues) companies join on and they continue to upsell existing enterprises. Even instances where people are starting to meet more in person, I expect those entities to keep their accounts and just use them less.
A private Telehealth company that came across my radar, Fruit Street, says it uses Zoom to facilitate diabetes management and more recently Covid-related telehealth visits.
My WAG is $560m with FY guidance raised to $2b. Which might very well be seen as “revenues are expected to fall next quarter” and cause a sell-off.
The search trend is rising for Zoom as well for Microsoft Teams and Google Meet from mid August onwards. My best guess is that this is due to the start of the new school year(?). Google Meet is starting to overtake MS Teams by the way. Schools like Google Meet more?
The search trend for Zoom also spikes on August 24th due to the Outage on that day. This spike also contributes to a rising search trend.
“ Google Meet is starting to overtake MS Teams by the way. Schools like Google Meet more?”
In my experience in education, Zoom is a far superior product to Google Meet. My bet is you’ll see more schools move away from Google Meet, which says something considering how integrated into schools Google already is.
I suspect that many school districts, like the one my children attend (Ann Arbor Michigan), are providing Chrome books to homogenize the technology requirements. That should likely improve Google meet penetration.
Please stop the discussion about which one is better. I think we all agree about Zoom being the most popular one right now.
I just wrote, that Google meet is overtaking MS Teams in searches on Google Trends.
Perhaps I should have added a bottom line to my post:
If this increase in search for video conferencing tools is due to the beginning of the school year, then it’s the students (meeting participants) searching for zoom to download the software.
The Zoom Outage had a very strong effect on search trends.
If both is true, then I don’t see this as a contributing effect to incremental revenue.