5 Pandemic Stocks That Are Losing Value

4. Zoom Video Communications, Inc. (NASDAQ:ZM)

Number of Hedge Fund Holders: 48

Loss in Share Price Over 6 Months as of March 1: 58.39%

Zoom Video Communications, Inc. (NASDAQ:ZM) is a California-based technology company that provides a video-first communications platform to customers worldwide. The pandemic pushed the stock price to almost $600 per share, as work, education, and social life was conducted virtually via Zoom Video Communications, Inc. (NASDAQ:ZM) during nationwide lockdowns.

Zoom Video Communications (NASDAQ:ZM) shares slipped by 1.5% in pre-market trading on March 1 as analysts weighed in on the company’s fourth-quarter results and slightly disappointing sales outlook. The company expects full-year sales to be between $4.53 billion and $4.55 billion, while Wall Street was looking for revenue of $4.75 billion. As the pandemic has eased and lockdowns are lifted worldwide, Zoom Video Communications (NASDAQ:ZM) has failed to maintain interest from investors as the stock has fallen to pre-COVID valuation levels, despite the continued business growth. 

On March 2, Barclays analyst Ryan MacWilliams lowered the price target on Zoom Video Communications (NASDAQ:ZM) to $150 from $245 and kept an Equal Weight rating on the shares.

A total of 48 hedge funds were long Zoom Video Communications (NASDAQ:ZM) in Q4 2021, down from 56 funds in the quarter earlier. ARK Investment Management held the biggest stake in the company, owning close to 7 million shares worth $1.26 billion. 

Here is what Artisan Partners has to say about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q1 2021 investor letter:

“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in video conferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”