What's going on?

Teleconferencing provider Zoom reported better-than-expected results across the board late on Wednesday, but there are still reasons to worry its connection with investors will get disrupted.

What does this mean?

Zoom�s fourth-quarter profit was more than double analysts� predictions, and its forecasts for the coming year were also startlingly positive. That might have something to do with the reputation it�s recently picked up as one of the few stocks that might actually benefit from the coronavirus outbreak: more and more companies, after all, would now prefer to hold remote meetings than risk infection. So never mind COVID-19 � investors certainly aren�t immune to Zoom�s charms: its shares are up more than 70% this year alone, which has pushed its valuation to 37 times forecast revenue and 270 times next year�s projected profits.

Why should I care?

For markets: Buy the rumor, sell the fact.

Zoom�s shares climbed higher throughout Thursday, but they initially fell despite its strong update. Markets don�t always react as you�d expect them to, mind you: prices often fall on good news and rise on bad. It�s more a matter of how that news compares to investor expectations. If those expectations are too high � like they were with Zoom � its shares might initially fall no matter how positive the update.

For you personally: Hang in there, kitty.

Coronavirus might�ve pushed new users to Zoom, but the real test will be whether it can monetize them. Zoom�s ability to do just that seems to have slipped since its well-received initial public offering: it�s failing to generate as much of a revenue uptick from the customers it�s held for a year or more as it did in 2019. The teleconferencing provider needs to prove it can keep all those new users too: as Finimizer Bami wisely pointed out in one of our Premium chats, �I’m not sure whether all these new sign-ups will stick around after the outbreak is over�…