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NASDAQ:ZM: good value for what you're paying.

By Mill Chart

Last update: Jul 9, 2024

Consider ZOOM VIDEO COMMUNICATIONS-A (NASDAQ:ZM) as a top value stock, identified by our stock screening tool. NASDAQ:ZM shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.


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Valuation Examination for NASDAQ:ZM

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:ZM scores a 7 out of 10:

  • A Price/Earnings ratio of 10.63 indicates a reasonable valuation of ZM.
  • ZM's Price/Earnings ratio is rather cheap when compared to the industry. ZM is cheaper than 92.36% of the companies in the same industry.
  • When comparing the Price/Earnings ratio of ZM to the average of the S&P500 Index (28.45), we can say ZM is valued rather cheaply.
  • Based on the Price/Forward Earnings ratio of 10.94, the valuation of ZM can be described as reasonable.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 90.55% of the companies listed in the same industry.
  • ZM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 20.21.
  • Based on the Enterprise Value to EBITDA ratio, ZM is valued cheaply inside the industry as 96.73% of the companies are valued more expensively.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 93.09% of the companies listed in the same industry.
  • ZM has a very decent profitability rating, which may justify a higher PE ratio.

Understanding NASDAQ:ZM's Profitability

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:ZM, the assigned 7 is a significant indicator of profitability:

  • The Return On Assets of ZM (8.14%) is better than 85.82% of its industry peers.
  • ZM has a better Return On Equity (10.10%) than 82.55% of its industry peers.
  • Looking at the Return On Invested Capital, with a value of 5.54%, ZM is in the better half of the industry, outperforming 80.00% of the companies in the same industry.
  • With an excellent Profit Margin value of 18.37%, ZM belongs to the best of the industry, outperforming 86.55% of the companies in the same industry.
  • ZM has a Operating Margin of 17.35%. This is amongst the best in the industry. ZM outperforms 87.27% of its industry peers.
  • ZM's Operating Margin has improved in the last couple of years.
  • ZM's Gross Margin of 76.33% is fine compared to the rest of the industry. ZM outperforms 72.00% of its industry peers.

Analyzing Health Metrics

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:ZM has received a 8 out of 10:

  • An Altman-Z score of 7.19 indicates that ZM is not in any danger for bankruptcy at the moment.
  • The Altman-Z score of ZM (7.19) is better than 76.36% of its industry peers.
  • ZM has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
  • A Current Ratio of 4.46 indicates that ZM has no problem at all paying its short term obligations.
  • ZM has a Current ratio of 4.46. This is amongst the best in the industry. ZM outperforms 84.36% of its industry peers.
  • A Quick Ratio of 4.46 indicates that ZM has no problem at all paying its short term obligations.
  • ZM's Quick ratio of 4.46 is amongst the best of the industry. ZM outperforms 84.36% of its industry peers.

Growth Assessment of NASDAQ:ZM

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:ZM boasts a 5 out of 10:

  • ZM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.00%, which is quite impressive.
  • 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.
  • ZM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 68.78% yearly.

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.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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NASDAQ:ZM (7/9/2024, 7:50:10 PM)

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