Zoom vs. Sony – A Path to Prosperity in a Pandemic?

Video conferencing and video games have been two of the largest beneficiaries during the Pandemic. Looking at the chart’s below what does an investor have to believe to buy Zoom instead of Sony?

As detailed in Motley Fool’s article below, Zoom has… “soared about 660% this year as the Covid-19 Crisis brought millions of new users to it’s video conferencing platform1.”  Similarly, as reported by Quartz2 and Nielsen3, video game consumption and usage has also soared. The charts below show:

  • Zoom is valued at a premium to Sony (1st pie chart, Combined Enterprise Value)
  • Sony has ~55x the revenue of Zoom (2nd pie chart, Combined Revenue) and
  • ~45x the profits of Zoom (3rd pie chart, Combined Net Income)

Kailash notes that Sony’s new PlayStation 5 sold out immediately4.  For more thoughts on price action not reflecting value, see our recent paper “IPO Stocks are the New Staples”.

 

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