Zoom vs Sony: Zoom is Too Expensive

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 (1^st pie chart, Combined Enterprise Value)
Sony has ~55x the revenue of Zoom (2^nd pie chart, Combined Revenue) and
~45x the profits of Zoom (3^rd 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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