Growth Headwinds

$JPMorgan (JPM.US)$ analyst Patrick Walravens said $Zoom Video Communications (ZM.US)$ ’s communications platform is superb, but growth headwinds and near-term uncertainty create risk for investors.

“All things considered, we see shares as fairly valued as Zoom is expected to grow at a slower rate than the peer group,” Walravens wrote.

Wells Fargo analyst Michael Turrin said Zoom’s guidance raises questions about normalized growth rates in 2022 and beyond.

“We expect these headwinds to weigh on results over the next several qtrs, keeping shares range-bound until clearer signs around what's next for ZM post hyper-growth emerge,” Turrin wrote.

Needham analyst Ryan Koontz said he will likely stay on the sidelines until Zoom demonstrates a return to mid-single-digit quarter-over-quarter growth.

“With topline growth still weighed down by weakening trends in the micro segment from pull-forward and temporary pandemic business, we look for a clear line of sight to the growth trough,” Koontz wrote.