In an era where remote and hybrid work models have become the norm, is Zoom Video Communications (ZM) a good investment for the future of work? Let’s delve into ZM’s financial health, innovative strides, and strategic moves to evaluate its potential as a future-proof investment. Year-to-date, ZM has declined -19.61%, versus a 14.54% rise in the benchmark S&P 500 index during the same period. Our proprietary rating system also evaluates each stock based on eight distinct categories. ZM has a B grade for Value and Quality, which is consistent with its lower-than-industry valuation and high-profit margins. Despite the upbeat financial performance, Zoom’s stock has faced headwinds, reflecting investor concerns amid competitive pressures.
Its rise, especially in 2020, was driven by the Coronavirus pandemic, and now investors are expecting Zoom stock price to fluctuate in the future. However, Zoom’s good management and preference by top brands imply that it is likely to remain profitable and could be a new force in the tech industry. Zoom is a member of the information technology sector and operates within the software industry. They include legacy web-based meeting service providers such as Cisco Systems Inc.’s (CSCO) WebEx and LogMeIn Inc.’s GoToMeeting. Rivals also include bundled productivity solution providers with video functionality such as Alphabet Inc.’s (GOOGL) Google G Suite and Microsoft Inc.’s (MSFT) Microsoft Teams. Other competitors are unified communications as a service (UCaaS) and legacy private bank exchange (PBX) providers such as 8×8 Inc. (EGHT), Avaya Holdings Corp. (AVYA), and RingCentral Inc. (RNG).
ZM price to earnings growth (PEG)
With an impressive externally audited track record, our proprietary stock rating tool — the Zacks Rank — is a more conclusive indicator of a stock’s near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Zoom Video. We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors’ interest in buying the stock, leading to its price moving higher.
- ZM’s trailing-12-month gross profit margin of 76.18% is 53.8% higher than the industry average of 49.54%.
- Compared to the Zacks Consensus Estimate of $1.13 billion, the reported revenues represent a surprise of +1.41%.
- ZM has a B grade for Value and Quality, which is consistent with its lower-than-industry valuation and high-profit margins.
- It’s almost impossible for a company to grow its earnings without growing its revenue for long periods.
These returns cover a period from January 1, 1988 through May 5, 2025. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return.
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Visit Performance Disclosure for information about the performance numbers displayed above. Privacy Policy | No cost, no obligation to buy anything ever.Past performance is no guarantee of future results. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term. Sign-up to receive the latest news and ratings for Zoom Video Communications and its competitors with MarketBeat’s FREE daily newsletter.
Zoom Video Communications Stock Analysis – MarketRank™
For instance, MSFT is upgrading its products with artificial intelligence (AI) technology from startup OpenAI. Recently, Microsoft Teams introduced new enhancements, including Copilot in Teams, to enhance collaboration and optimize hybrid meetings. Zoom is a relatively new firm that has consistently grown its revenue within a short time.
- Likewise, the stock’s forward EV/EBITDA and EV/Sales multiples of 5.92 and 2.36 are 59.5% and 19.5% lower than the respective industry averages of 14.60 and 2.93.
- The company was incorporated in 2011 and is headquartered in San Jose, California.
- Let’s delve into ZM’s financial health, innovative strides, and strategic moves to evaluate its potential as a future-proof investment.
- Zoom Video is graded C on this front, indicating that it is trading at par with its peers.
Please bear with us as we address this and restore your personalized lists. The facts discussed here and much other information on Zacks.com might help determine whether or not it’s worthwhile paying attention to the market buzz about Zoom Video. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term. We’ll be in your inbox every morning Monday-Saturday with all the day’s top business news, inspiring stories, best advice and exclusive reporting from Entrepreneur. We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025. Jeremy Barker started the business in 2012 and hit $5 million revenue by 2016.
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This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. For the next fiscal year, the consensus earnings estimate of $5.09 indicates a change of +1% from what Zoom Video is expected to report a year ago. For the next fiscal year, the consensus earnings estimate of $5.04 indicates a change of +2.2% from what Zoom Video is expected to report a year ago. The consensus earnings estimate of $5.31 for the current fiscal year indicates a year-over-year change of +1.9%. Information contained on this website maintained by Magnifi Communities LLC is provided for educational purposes only and are neither an offer nor a recommendation to buy or sell any security, options on equities, or cryptocurrency. Magnifi Communities LLC and its affiliates may hold a position in any of the companies mentioned.
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Zoom Video reported revenues of $1.14 billion in the last reported quarter, representing a year-over-year change of +3.3%. Even though a company’s earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It’s almost impossible for a company to grow its earnings without growing its revenue for long atfx broker review periods. Therefore, knowing a company’s potential revenue growth is crucial. Zoom Video is expected to post earnings of $1.23 per share for the current quarter, representing a year-over-year change of -8.2%.
For valuing profitable companies with steady earnings
As of Aug. 23, 2021, Zoom had 240,744,533 outstanding shares of Class A common stock and 56,383,369 outstanding shares of Class B common stock. The U.S. government has been increasing its scrutiny of Zoom on several fronts. In 2020, the United how to trade with bar chart States charged a China-based Zoom executive with conspiring to disrupt videoconference commemorations of the 1989 Tiananmen Square democracy protests.
Enter your email address below to receive a concise daily summary of insider buying activity, insider selling activity and changes in hedge fund holdings. Want to know when executives and insiders are buying or selling Zoom Video Communications stock? Sign up for InsiderTrades.com’s daily newsletter to get the latest insider transactions delivered to your inbox daily. The company is headquartered in San Jose, Calif., and has additional offices in more than 15 locations in the United States, Europe, Asia, and Australia.
For Zoom Video, the consensus sales estimate for the current quarter of $1.15 billion indicates a year-over-year change of +0.9%. For the current and next fiscal years, $4.62 billion and $4.78 billion estimates indicate +2% and +3.6% changes, respectively. I just uncovered a shocking anomaly in the options market that could change everything…One that lets you target extra cash on days when most people make nothing – weekends.Think what that could mean for your monthly budget… The company beat consensus EPS estimates in each of the trailing four quarters.
Also, its free cash flow (on a non-GAAP basis) stood at $569.68 million, up 50.4% year-over-year. Moreover, recent enhancements aimed at improving user experience and flexibility further bolster Zoom’s appeal in the evolving remote and hybrid work landscape. Furthermore, the stock’s trailing-12-month net income margin, ROCE, and ROTA of 18.37%, 11.31%, and 8.14% compares to the industry averages of 2.81%, 4.04%, and 1.59%, respectively. ZM’s trailing-12-month gross profit margin of 76.18% is 53.8% higher than the industry average of 49.54%.
ZM – In an era where remote and hybrid work models have become the norm, is Zoom Video Communications (ZM) a good investment for the future of work? Let’s delve into ZM’s fxtm review financial health, innovative strides, and strategic moves to evaluate its potential as a future-proof investment. In Zoom’s case, the bulk of its profits in 2020 were driven by the COVID-19 pandemic that forced people to work from home.