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NASDAQ:ZM is an undervalued gem with solid fundamentals.

By Mill Chart

Last update: Apr 11, 2024

ZOOM VIDEO COMMUNICATIONS-A (NASDAQ:ZM) is a hidden gem identified by our stock screening tool, featuring undervaluation and robust fundamentals. NASDAQ:ZM showcases decent financial health and profitability, coupled with an attractive price. Let's dig deeper into the analysis.

A Closer Look at Valuation for NASDAQ:ZM

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:ZM was assigned a score of 7 for valuation:

  • With a Price/Earnings ratio of 11.94, the valuation of ZM can be described as very reasonable.
  • Based on the Price/Earnings ratio, ZM is valued cheaply inside the industry as 91.70% of the companies are valued more expensively.
  • ZM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.
  • Based on the Price/Forward Earnings ratio, ZM is valued cheaply inside the industry as 91.34% of the companies are valued more expensively.
  • ZM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.17.
  • Based on the Enterprise Value to EBITDA ratio, ZM is valued cheaper than 93.86% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, ZM is valued cheaper than 93.86% of the companies in the same industry.
  • The decent profitability rating of ZM may justify a higher PE ratio.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:ZM, the assigned 7 is noteworthy for profitability:

  • The Return On Assets of ZM (6.42%) is better than 84.12% of its industry peers.
  • ZM has a Return On Equity of 7.95%. This is amongst the best in the industry. ZM outperforms 81.23% of its industry peers.
  • ZM has a better Return On Invested Capital (4.33%) than 77.62% of its industry peers.
  • Looking at the Profit Margin, with a value of 14.08%, ZM belongs to the top of the industry, outperforming 85.20% of the companies in the same industry.
  • ZM's Operating Margin of 13.21% is amongst the best of the industry. ZM outperforms 84.48% of its industry peers.
  • ZM's Operating Margin has improved in the last couple of years.
  • With a decent Gross Margin value of 76.35%, ZM is doing good in the industry, outperforming 72.92% of the companies in the same industry.

Exploring NASDAQ:ZM's Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:ZM, the assigned 8 reflects its health status:

  • ZM has an Altman-Z score of 7.80. This indicates that ZM is financially healthy and has little risk of bankruptcy at the moment.
  • ZM has a Altman-Z score of 7.80. This is amongst the best in the industry. ZM outperforms 81.95% of its industry peers.
  • There is no outstanding debt for ZM. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
  • ZM has a Current Ratio of 4.50. This indicates that ZM is financially healthy and has no problem in meeting its short term obligations.
  • With an excellent Current ratio value of 4.50, ZM belongs to the best of the industry, outperforming 85.56% of the companies in the same industry.
  • A Quick Ratio of 4.50 indicates that ZM has no problem at all paying its short term obligations.
  • ZM's Quick ratio of 4.50 is amongst the best of the industry. ZM outperforms 85.56% of its industry peers.

Assessing Growth for NASDAQ:ZM

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:ZM has received a 5 out of 10:

  • The Earnings Per Share has grown by an nice 19.22% over the past year.
  • Measured over the past years, ZM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.09% on average per year.
  • Measured over the past years, ZM shows a very strong growth in Revenue. The Revenue has been growing by 68.78% on average per year.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of ZM for a complete fundamental analysis.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.

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ZOOM VIDEO COMMUNICATIONS-A

NASDAQ:ZM (5/24/2024, 7:06:09 PM)

After market: 63.4 +0.39 (+0.62%)

63.01

+0.59 (+0.95%)

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