Zoom Video (ZM) has announced that it will be selling hardware to accompany its popular video conferencing technology.
The company will be adding a product category which will be a third-party developed display that will incorporate Zoom’s software. It will be called Zoom for Home DTEN ME, a name that reflects Zoom’s joint partnership with the manufacturer, DTEN in developing the product. The all-in-one 27-inch smart display will incorporate its built-in cameras, microphone, and touch capabilities at an estimated price of $599 starting next month.
In an interview with Tech Crunch on July 15, Head of Zoom Rooms Jeff Smith said, “Zoom for Home is an initiative from Zoom that allows any Zoom user to deploy a personal collaboration device for their video meetings, phone calls, interactive whiteboard annotation — all the good stuff that you want to do on Zoom, you can do with a dedicated purpose-built device.”
Zoom also launched “Zoom Room’s Hardware as a Service” earlier this month with a subscription service that provides video conference room accessories and cloud phone products. Its hardware may give the company an edge over its other enterprise-servicing competitors, Microsoft’s (MSFT) Skype and Cisco System’s (CSCO) WebEx.
With the outbreak of the pandemic, Microsoft reported 40 million daily active users in March with Skype. Additionally, Cisco published numbers that reflected a measurement by its number of participants, which was 500 million at triple the level of the previous month. Zoom, however, went from being a corporate niche product with 10 million daily participants to a household name with over 300 million daily participants.
CFRA analyst Keith Snyder assigned a Sell rating on Zoom’s stock on July 15 saying that “Zoom’s April quarter results were “nothing short of extraordinary” but he doesn’t think it will repeat itself. “While we expect Zoom to continue growing, we believe the strong results during the April quarter represent a pull-forward of sales, which would have been spread out over many quarters, and that the demand surge created by pandemic lockdown orders has run its course.”
The analyst set his price target at $215 which suggests a downside potential of 16%. He added, “Our Sell opinion reflects our view that Zoom shares have gotten ahead of themselves as investors pile into any company expected to benefit from the Covid-19 outbreak.”
On July 8, Morgan Stanley analyst Meta Marshall commented on Zoom’s hardware saying, “We view this positively for ZM as it increases stickiness of both the Zoom Phone and Rooms products for customers, given it will be more difficult for customers to switch over to a competitive product within meeting rooms as well as for phones.” She reiterated a Hold rating on the shares with a price target of $190 (25% downside potential).
Overall, 11 analysts assign Buy ratings, 8 Hold ratings, and 2 Sell ratings, giving ZM a Moderate Buy Street consensus. The average analyst price target stands at $226 implying 12% downside potential, with shares up 277% year-to-date. (See Zoom’s stock analysis on TipRanks).
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