Zoom shares tumble 17% in worst day in 9 months

Zoom Video Communications Inc shares tumbled nearly 17 percent to close at $289.50 Tuesday after it experienced a faster-than-expected drop in demand, with its business plans becoming questionable as people return to the office.

The price drop was the most in over nine months for Zoom.

With the easing of the pandemic, Zoom will need new growth avenues.

Analysts expect Zoom to return to its true underlying growth rate after a few quarters.

Daiwa Capital noted that there are significant questions on how new customer demand will stabilize in the core business following the loosening of COVID-19 restrictions.

Zoom forecast its revenue this quarter to be between $1.015 billion and $1.020 billion, indicating a 31 percent raise, but less than the multiple-fold growth rates in 2020.

At least six brokerages reduced their price targets on Zoom, with Piper Sandler being the most bearish, slashing its price target by over $100 to $369, according to Refinitiv data.

Zoom's current capitalization is half of its peak in October at $175 billion.