Zoom Video shares were named the highest conviction pick for 2021 by a Bernstein analyst.
Bernstein has an outperform rating on the video conferencing company’s stock, and a $610 price target. This followed news of Zoom sold 1 million seats for its phone service – a business that was introduced two years ago.
The analysts at Bernstein are sanguine that revenue from Zoom Phone will contribute substantial returns in a shorter period than many investors expect. The firm expects that Zoom Phone could surpass 8 million paid users by the end of calendar year 2022, and 13 million by the end of 2023.
Zoom Phone would have a market value of $80 billion by 2023, considering a multiple of 20 times price to sales – according to Bernstein.
Bernstein analyst Zane Chrane said that with all Zoom Phone users on paid plans (i.e., no free tier like with videoconferencing), related revenue could grow much more rapidly relative to the user count than has been the case with Zoom VC. "Such a growth trajectory would yield about $4 billion in annual recurring revenue by the end of calendar year 2023, at which point Phone should still be growing top line about 50% year over year" , the analyst added.