By Arsheeya Bajwa

Nov 26 (Reuters) - Zoom Communications shares

tumbled nearly 11% before the bell on Tuesday, as its forecast

for low single-digit annual revenue growth disappointed

investors after a recent rally.

Stiff competition from rival video conferencing services

including Microsoft Teams has pressured Zoom, even as

it expands its offerings with products such as phone systems and

artificial intelligence assistants to boost demand.

Zoom, which rose to prominence during the pandemic, raised

its expectations for fiscal year 2025 adjusted profit and

revenue on Monday.

The midpoint of the San Jose, California-based company's new

annual revenue expectation of $4.656 billion to $4.661 billion

was in line with analysts' average estimate of $4.66 billion,

according to data compiled by LSEG.

The midpoint of its fourth-quarter revenue forecast was also

just about $1 million above estimates.

"Even at this beat-and-raise cadence, the accelerating

growth is potentially peaked or nearing it," Piper Sandler

analysts said.

The company's yearly revenue growth rate is expected to

average at 3.1% for fiscal year 2025, 2026 and 2027 according to

data compiled by LSEG. Comparatively, Zoom recorded average

annual growth of 21.6% in the three fiscal years preceding 2025.

Zoom, shares of which have risen 19% this month, was set to

lose close to $3 billion in market value if the premarket losses

hold. Its market capitalization peaked in October 2020, crossing

the $100 billion mark, but has since slumped to about $24.52

billion.

In a nod to its efforts to diversify its business away from

its core video conferencing platform, the company changed its

name from Zoom Video Communications ( ZM ) to Zoom Communications.

"Ditching the 'Video' part of its name should help the

market and prospective customers realize the business is not the

same as the one which thrived during the pandemic," said A.J.

Bell analyst Dan Coatsworth.

Coatsworth also attributed the drop in Zoom's shares to

"profit taking after a very strong run ahead of the figures".