COVID-friendly stocks may come in all shapes and sizes, but if you had to pick one that defined the term, it\u2019d be Zoom Communications (Zoom Communications Stock Quote, Chart, News, Analysts, Financials NASDAQ:ZM), whose share price took to the stratosphere once lockdowns became a reality. Now, one year in and with the light at the end of the pandemic tunnel pretty visible, investors should be questioning their Zoom holdings, says Darren Sissons of Campbell, Lee & Ross, because if there\u2019s one COVID stock that\u2019s ripe for a major pullback, it\u2019s ZM. \u201cIf you put it in context, you really have to look at what happened to Zoom, where it went to and think about what the competitive threats are going to be,\u201d says Sissons, vice-president at Campbell, Lee & Ross, who spoke on BNN Bloomberg on Wednesday. \u201cThe stock went to $586 because everyone was at home and needed to communicate. And then, obviously, there was a big rush into the stock, with huge, huge returns,\u201d Sissons said. \u201cBut now the company has become a short target, so people are shorting it and they\u2019re shorting it huge, and the stock is down significantly from its peak.\u201d Zoom delivered fourth quarter and fiscal 2021 results earlier this week, beating analysts\u2019 estimates on revenue and earnings. Total revenue hit $882.5 million, up a monster 369 per cent year-over-year, and non-GAAP net income was $365.4 million or $1.22 per share compared to $43.2 million or $0.15 per share a year earlier. Analysts had been expecting revenue of $811.8 million and earnings of $0.79 per share. (All figures in US dollars.) For the full fiscal 2021, Zoom managed revenue of $2.651 billion versus just $622 million for its fiscal 2020. Management guided for an even stronger year ahead, forecasting fiscal 2022 revenue of between $3.760 and $3.780 billion and earnings between $3.59 and $3.65 per share, while for the fiscal first quarter 2022, Zoom called for revenue between $900.0 million and $905.0 million and earnings between $0.95 and $0.97 per share. \u201cThe fourth quarter marked a strong finish to an unprecedented year for Zoom. In FY2021, we significantly scaled our business to provide critical communications and collaboration services to our customers and the global community in response to the pandemic,\u201d said Eric S. Yuan, founder and CEO, in a press release. \u201cAs we enter FY2022, we believe we are well positioned for strong growth with our innovative video communications platform on which our customers can build, run and grow their businesses, our globally recognized brand and a team ever-focused on delivering happiness to our customers.\u201d After a mammoth return of almost 400 per cent last year, Zoom\u2019s share price has been up and down over the first stretch of 2021. ZM is currently flat for the year. So far, Zoom has continued to grow its customer base, hitting 467,100 customers with more than ten employees, up from 433,700 at the end of the previous quarter. But Sissons says the competitive landscape is only going to get more crowded, with video communications becoming more of a focus in the tech industry. \u201cMicrosoft Teams has a product and you can bet that there will be quite a lot of offerings coming out of Silicon Valley and other places to provide alternatives to the Zoom platform,\u201d Sissons said. \u201cAt this level, I think the best option here is a short. I just I think this is a very dangerous trade. It\u2019s going to come back and as people start to jump out of it, the institutional guys will get out of it. In the end it's just going to continue to go south. So I would definitely stay away.\u201d \u201cWhen you look at the underlying fundamentals, it is profitable and revenues did grow significantly but if I remember correctly the valuation got to something like $15 billion off like something like $600 million in revenue. It just makes no sense,\u201d Sissons said. JP Morgan analyst Sterling Auty is also cautious on Zoom, delivering an update to clients on Tuesday after the Q4 earnings release. Auty lifted his target price from $450 to $456 but kept his \u201cNeutral\u201d rating on ZM, saying he expects a slowdown in growth. At the time of publication Auty\u2019s target represented a projected 12-month return of 11 per cent. \u201cThe April quarter begins the ramp into tougher compares and that will have investors continuing to discuss what the appropriate post-pandemic growth rate for Zoom will look like at this scale,\u201d Auty said. \u201cThere is still a tremendous amount of growth opportunity in the market in both international and the Zoom Phone segments but the question will be the rate and pace of adoption post-pandemic,\u201d Auty said. Auty cautioned that Zoom\u2019s reliance on customers with less than ten employees, currently representing 37 per cent of the company\u2019s revenue, could be a weak spot in a post-pandemic economy. \u201cWe believe this customer base could pose a higher risk to churn rates going forward given that it is the most likely to be impacted if a vaccine becomes widely available,\u201d Auty said.