Zoom Communications shares have fallen more than 20% over the past month, and the decline may not be over. The video conferencing company reported just 5.5% year-over-year revenue growth in its fiscal 2027 first quarter and guided for only 4% growth in the second quarter, with full-year revenue expected to rise 4.4% to $5.085 billion at the midpoint. While the stock trades at a 12.7 price-to-earnings ratio, its price/earnings-to-growth ratio stands at 4.2, signaling overvaluation relative to its slowing expansion. Zoom faces intense competition from Google Meet and Microsoft Teams, which offer similar services often with more generous free features and lower paid-plan pricing, making it difficult for the company to reignite meaningful growth.
Zoom Video Communications IncRevenue growth slowing to 5.5% and guidance for only 4% growth indicates weak demand for its video conferencing services.
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