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Zoom Video Communications Inc ZM

Morningstar Rating
$63.15 +1.03 (1.65%)
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Company Report

Zoom’s Growing Portfolio, Strong Margins, and Switching Costs Help Support a Narrow Moat

Zoom Video Communications says its mission is "to make video communications frictionless," which it seeks to accomplish with a unified, video-first communications platform that incorporates video, voice, chat, and content sharing. The company offers a differentiated peer-to-peer technology, complete with proprietary routing technology. Zoom is a recognized market leader in meeting software and is disrupting and expanding the $100 billion market for collaboration software with its ease of use and superior user experience. We think the pandemic lockdowns demonstrated the strength of the solutions, which combined with an expanding portfolio helps establish a narrow moat.

Price vs Fair Value

ZM is trading at a 30% discount.
Price
$62.12
Fair Value
$75.00
Uncertainty
Very High
1-Star Price
$197.64
5-Star Price
$16.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Zoom's user base and revenue surged during the pandemic; we expect most of these users to remain customers and drive continued growth in the coming years.

Bears

The biggest risk facing Zoom is executing across so many different aspects of growth simultaneously. For example, Zoom Phone is a more complex sale, and the company is moving from smaller to larger customers.

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News

Trading Information

Previous Close Price
$62.12
Day Range
$62.4463.37
52-Week Range
$58.8776.97
Bid/Ask
$63.13 / $63.18
Market Cap
$19.21 Bil
Volume/Avg
1.8 Mil / 3.8 Mil

Key Statistics

Price/Earnings (Normalized)
12.80
Price/Sales
4.35
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
0.05%

Company Profile

Zoom Video Communications provides a communications platform that connects people through video, voice, chat, and content sharing. The company’s cloud-native platform enables face-to-face video and connects users across various devices and locations in a single meeting. Zoom, which was founded in 2011 and is headquartered in San Jose, California, serves companies of all sizes from all industries around the world.
Sector
Technology
Industry
Software - Application
Stock Style Box
Mid Growth
Total Number of Employees
8,484

Competitors

Valuation

Metric
ZM
FIVN
RNG
Price/Earnings (Normalized)
12.8038.3510.93
Price/Book Value
2.6311.23
Price/Sales
4.356.201.44
Price/Cash Flow
11.0924.145.33
Price/Earnings
ZM
FIVN
RNG

Financial Strength

Metric
ZM
FIVN
RNG
Quick Ratio
4.014.970.93
Current Ratio
4.275.531.34
Interest Coverage
−12.89−3.36
Quick Ratio
ZM
FIVN
RNG

Profitability

Metric
ZM
FIVN
RNG
Return on Assets (Normalized)
17.91%10.88%15.30%
Return on Equity (Normalized)
23.26%35.02%
Return on Invested Capital (Normalized)
22.94%11.03%25.91%
Return on Assets
ZM
FIVN
RNG
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