Zoom (ZM): Has it reached the bottom?

Key Points

• The stock market continued to rise for the second day in a row after it has become apparent that fully vaccinated people can take their masks off.
• Zoom Video Communication (ZM) jumped more than 6% as some financial analysts believe the stock has reached its bottom.
• The Walt Disney Company (DIS) dropped by more than 2% despite a stellar growth in its paid streaming subscribers.

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​Overall Market

The Stock Market Rallied for the Second Day in A Row On The Possibility of Unmasked by Fully Vaccinated Customers

​All three indices finished in the green for the second day in a row. The news broke that fully vaccinated people can take off their masks even indoors. The market took it as a sign that the COVID-19 pandemic is behind us already and rallied on the news. 

The rally was despite a flattening of the retail sales in April. It seems the boost from stimulus checks has faded. Nevertheless, investors sent the stock market up, especially the Nasdaq index. 

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​What's Up

Zoom (ZM): Has It Reached The Bottom?

Shares of Zoom Video Communications (ZM) were up more than 6%. The stock is quite far from its pandemic glory days of $588 per share. Today's price jump came after a few comments and an upgrade by financial analysts who believe Zoom's stock has fallen enough and is poised for a rebound.
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Even at $308 per share, the stock is overvalued considering traditional valuation ratios such as price to earnings ratio of more than 128, and price to sales ratio of more than 32. 

I hold some Zoom shares in my Windmill portfolio. I agree that Zoom would continue to stay an essential tool for businesses and consumers now that the pandemic has fast-forwarded the adoption of the technology.

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What's Down

The Walt Disney (DIS) Dropped by More Than 2% Despite a Stellar Growth in Its Paid Streaming Subscribers

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The Walt Disney (DIS) shares dropped more than 2% today as the company released its latest quarterly earnings report. The pandemic has led to the closure of the company's parks and resorts for several months, and the impact on its revenue is still quite visible. The company's Park and Resort revenue were down by 44% year-over-year. Moreover, film and movie releases have been delayed for the same reason. The impact is visible on the company's revenue.

In contrast, Disney+ and ESPN+ streaming platforms remained the company's heroes with more than 100% and 75% annual growth in the number of paid subscribers compared to the last year. 

Now that vaccination is well underway and fully vaccinated customers can take their masks off, it's not too unlikely that the market celebrates the news by buying some Disney shares when the revenue shows signs of recovery in upcoming quarters.

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