Zoom Video Communications (NASDAQ:ZM), the video conferencing company, has launched 'Zoom Docs', an artificial intelligence (AI)-driven document management tool. The announcement was made at the firm's annual conference on Tuesday, aiming to enhance its platform amid post-lockdown office returns and stiff competition from tech giants Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOGL).
Zoom's market capitalization stands at $20.48 billion, with a P/E ratio of 142.21, according to InvestingPro data. Despite a declining trend in earnings per share, as indicated by InvestingPro Tips, the company's free cash flow exceeds net income, showing high earnings quality. It's also noteworthy that Zoom holds more cash than debt on its balance sheet, providing a solid financial footing for the company.
While Zoom's shares have remained stagnant compared to the S&P 500's 10% rise, the company's Chief Financial Officer (CFO), Kelly Steckelberg, sees this new product as a step towards expanding Zoom's platform. This move comes as Zoom's stock price has often moved in the opposite direction of the market, as per InvestingPro Tips.
The move places Zoom in direct competition within the collaborative applications market, which is currently led by Microsoft with a 30% share, followed by Google with a 13.5%, according to data from the International Data Corporation (IDC). Zoom holds an 11% share in this market. The company's revenue for the last twelve months was $4463.74 million with a revenue growth of 3.92%, as per InvestingPro data.
The launch of 'Zoom Docs' comes at a time when Microsoft Teams has been drawing business away from Zoom's customer base. Despite this, Zoom reported a 7% increase in its enterprise customer base from the previous year, now standing at 218,100 enterprises. This is in line with the InvestingPro Tips prediction that Zoom's net income is expected to grow this year, and the company will be profitable.
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