A hybrid return to office in the corporate world is an opportunity for Zoom Video to differentiate itself and excel, and investors should buy in, according to RBC Capital Markets. Shares of the video conferencing company rose dramatically in 2020 as the Covid pandemic caused a scramble for solutions for companies working from home. However, the stock is down 38% from its late October peak as the fast development of a Covid vaccine led investors to focus on Zoom's post-pandemic future. RBC analyst Rishi Jaluria initiated coverage of the stock with an outperform rating, naming Zoom a top pick. Jaluria said in a note to clients on Thursday evening that the platform will continue to be a key part of work life in the future, particularly for larger enterprise customers. "The future of work will likely be hybrid and we believe Zoom will be a critical component to enabling that future. We would argue that hybrid and distributed work is a tougher problem to solve than all employees working remote, as meetings will happen across devices (e.g. laptops, mobile phones, hardware meeting rooms)," the note said. RBC set a price target of $450 per share for Zoom, which is nearly 30% above where the stock closed on Thursday. Zoom has rolled out a phone product and has other projects that should expand the business beyond pure video conferencing. That iteration, combined with high quality, will help Zoom carve out a permanent roll despite deep-pocketed competitors. "While we are not dismissive of competition, especially from giants like Microsoft and Google, we view Zoom's video conferencing as being meaningfully differentiated on its reliability, scalability, and ease-of-use. We believe this and the critical nature of video conferencing will be enough to hold off 'good enough' competition, particularly from Microsoft Teams," the note said. -CNBC's Michael Bloom contributed to this report.
Eric Yuan, founder and chief executive officer of Zoom Video Communications, at right, speaks with Jay Heller, head of capital markets & initial public offering execution of Nasdaq, during the company's IPO at the Nasdaq MarketSite in New York on April 18, 2019.
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A hybrid return to office in the corporate world is an opportunity for Zoom Video