Microsoft, Google And Zoom: Benefits For These Video-Collaboration Stocks Will Outlast The Coronavirus Outbreak

by Trefis Team
-3.41%
Downside
211
Market
204
Trefis
MSFT
Microsoft
Rate   |   votes   |   Share

Zoom (NASDAQ:ZM), Microsoft (NASDAQ:MSFT), LogMeIn (NASDAQ:LOGM), Cisco (NASDAQ:CSCO), and Google (NASDAQ:GOOG) – what do they all have in common? They are key players in video-collaboration – which has emerged as a strong theme in the coronavirus-hit world. Their video-collaboration products are likely to maintain strong relevance in the post-pandemic world as corporations rethink and redesign their operating models.

While the broader S&P 500 is down by 13% so far this year, Zoom has gained over 100%, Microsoft has gained 11%, LogMeIn has remained nearly flat, Google is down 1%, and Cisco has fallen 13%, indicating that all except Cisco generated excess returns compared to the market. Overall, Microsoft, Google, and Zoom are not only capitalizing on the emerging video-collaboration opportunity but are also creating a space to challenge incumbents such as Cisco. We detail trends in Video-Collaboration Stocks in an interactive dashboard, parts of which we highlight below.

 

Zoom (+104% YTD, $39 billion market cap)  It is not surprising that Zoom is leading the pack among video-conferencing stocks in terms of YTD returns. There are two reasons for this. First, unlike the others, video-conferencing is Zoom’s primary business. Second, the company’s average daily meeting participants have grown 30x this year – up from 10 million in Dec 2019 to a massive 300 million in Apr 2020.

Microsoft (+11% YTD, $1,320 billion market cap) – While video-conferencing forms a small part of what Microsoft does, the growth this year in its user base and daily meeting participants has been phenomenal. This can potentially create up-selling opportunities for its other products.  The company saw its video-conferencing user base jump nearly 70% in a single month, reaching 75 million in Apr 2020. It also saw its daily meeting participants peak at 200 million during the same month.

Google (-1% YTD, $900 billion market cap)  – While Google is growing fast on the video conferencing front, it is still behind Zoom and Microsoft. The company added nearly 3 million users every day back in April and reached daily meeting participant count of 100 million. Like Microsoft, video conferencing forms a small part of Google’s business. However, as advertising sales plummet, the pandemic presents an opportunity for Google to leverage video-conferencing as a channel to push its business productivity products.

LogMeIn (-0.5% YTD, $4 billion market cap)  – LogMein has a much smaller user base of 28 million across all its products. However, its GoToMeeting video-conferencing product saw a ~10x increase in average usage in Mar 2020 and a sharp jump in mobile downloads.

Cisco (-13% YTD, $173 billion market cap)  – Although Cisco has one of the largest user bases for video conferencing at 300 million, the growth trajectory, especially during the pandemic situation, is unclear. Unlike Zoom, Microsoft, and Google, Cisco has not released its daily meeting participant count. We believe that the others very likely fared much better than Cisco in terms of growth.

 

Did you know healthcare companies working on Coronavirus vaccines have fared better still – gaining an average of 130% year-to-date? See our dashboard analysis about COVID Vaccine Stocks for a list of U.S.-listed companies developing Coronavirus vaccines.

 

See all Trefis Price Estimates and Download Trefis Data here

What’s behind Trefis? See How It’s Powering New Collaboration and What-Ifs For CFOs and Finance Teams | Product, R&D, and Marketing Teams

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!