“1 cheap growth stock I think can become as big as Zoom!” Friday, 20th November, 2020)29 Nov 2020 01:48
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1 cheap growth stock I think can become as big as Zoom!
Zaven Boyrazian | Friday, 20th November, 2020 |
The adoption of video conferencing solutions provided by growth stocks like Zoom Video Communications has accelerated in the Covid-19 lockdowns. The transition to reduce face-to-face meetings had already begun before the pandemic, as businesses sought to reduce their carbon footprints. However, while Zoom is thriving under current market conditions, the platform is not perfectly suited for all types of business activities. That’s where this cheap growth stock comes into play.
An opportunity to beat Zoom?
LoopUp Group (LSE:LOOP) also provides a video conferencing platform. There is a vast array of competitors within the market space. However, the firm has differentiated itself by targeting the professional services market (PSM). This includes legal, financial, and client-led business sectors.
Clients in the PSM sector have distinct needs and priorities compared to the general video conferencing market that Zoom focuses on. Most conference calls are with external guests who may have little patience for downloading and learning new software.
LoopUp’s platform is designed specifically to suit the needs of businesses and their external guests. Members can create and join calls by using a phone and an Internet browser – no software download needed.
How does the growth stock work?
The business model is quite simple. Customers can either subscribe to a monthly package or elect for a pay-as-you-go option. The platform seamlessly integrates with Microsoft Outlook, allowing the host to schedule meetings and create groups.
This approach may appear simple, but so far, LoopUp has been the only firm to execute it on a large scale successfully. With support for up to 150 people in a single call – and no loss in quality – the company has grown a client list of over 5,000 companies including over 20% of the world’s top-100 private equity firms.
The financials
Before Covid-19, active users had been increasing by double digits each year like clockwork. Once lockdown came into effect across Europe, daily active users exploded to 75m – a 70% increase in just seven weeks.
In the short term, these figures are obviously non-sustainable. However, it has exposed many new customers to the platform. With some companies intending to retain their work-from-home policies to reduce fixed costs, it’s reasonable to assume that LoopUp will keep many new users.
https://www.fool.co.uk/investing/2020/11/20/1-cheap-growth-stock-i-think-can-become-as-big-as-zoom/
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