ZOOM COMMUNICATIONS INC (ZM) Stock Fundamental Analysis
NASDAQ:ZM - Nasdaq - US98980L1017 - Common Stock - Currency: USD
Taking everything into account, ZM scores 7 out of 10 in our fundamental rating. ZM was compared to 283 industry peers in the Software industry. ZM has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. ZM is not valued too expensively and it also shows a decent growth rate. With these ratings, ZM could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
In the past year ZM was profitable.
ZM had a positive operating cash flow in the past year.
In the past 5 years ZM has always been profitable.
In the past 5 years ZM always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.19%, ZM belongs to the top of the industry, outperforming 84.81% of the companies in the same industry.
ZM has a Return On Equity of 11.31%. This is in the better half of the industry: ZM outperforms 78.80% of its industry peers.
ZM has a Return On Invested Capital of 6.87%. This is in the better half of the industry: ZM outperforms 78.80% of its industry peers.
ZM had an Average Return On Invested Capital over the past 3 years of 5.31%. This is significantly below the industry average of 12.21%.
The last Return On Invested Capital (6.87%) for ZM is above the 3 year average (5.31%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 11.31% | ||
| ROIC | 6.87% |
ROA(3y)5.63%
ROA(5y)9.55%
ROE(3y)6.98%
ROE(5y)12.42%
ROIC(3y)5.31%
ROIC(5y)8.46%
1.3 Margins
ZM has a Profit Margin of 21.65%. This is amongst the best in the industry. ZM outperforms 88.34% of its industry peers.
In the last couple of years the Profit Margin of ZM has grown nicely.
ZM has a Operating Margin of 17.43%. This is amongst the best in the industry. ZM outperforms 85.16% of its industry peers.
In the last couple of years the Operating Margin of ZM has grown nicely.
Looking at the Gross Margin, with a value of 75.79%, ZM is in the better half of the industry, outperforming 70.67% of the companies in the same industry.
In the last couple of years the Gross Margin of ZM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.43% | ||
| PM (TTM) | 21.65% | ||
| GM | 75.79% |
OM growth 3Y-12.41%
OM growth 5Y53.59%
PM growth 3Y-13.57%
PM growth 5Y43.97%
GM growth 3Y0.67%
GM growth 5Y-1.44%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ZM is destroying value.
ZM has less shares outstanding than it did 1 year ago.
The number of shares outstanding for ZM has been increased compared to 5 years ago.
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.
2.2 Solvency
An Altman-Z score of 9.32 indicates that ZM is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 9.32, ZM belongs to the best of the industry, outperforming 83.75% of the companies in the same industry.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 9.32 |
ROIC/WACC0.63
WACC10.93%
2.3 Liquidity
A Current Ratio of 4.56 indicates that ZM has no problem at all paying its short term obligations.
ZM has a better Current ratio (4.56) than 84.81% of its industry peers.
A Quick Ratio of 4.56 indicates that ZM has no problem at all paying its short term obligations.
ZM has a Quick ratio of 4.56. This is amongst the best in the industry. ZM outperforms 84.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.56 | ||
| Quick Ratio | 4.56 |
3. Growth
3.1 Past
ZM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.14%.
The Earnings Per Share has been growing by 73.67% on average over the past years. This is a very strong growth
The Revenue has been growing slightly by 3.05% in the past year.
ZM shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 49.60% yearly.
EPS 1Y (TTM)6.14%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%-0.7%
Revenue 1Y (TTM)3.05%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%3.29%
3.2 Future
Based on estimates for the next years, ZM will show a small growth in Earnings Per Share. The EPS will grow by 0.09% on average per year.
ZM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.81% yearly.
EPS Next Y0.8%
EPS Next 2Y1.36%
EPS Next 3Y2.16%
EPS Next 5Y0.09%
Revenue Next Year2.73%
Revenue Next 2Y3.05%
Revenue Next 3Y3.3%
Revenue Next 5Y2.81%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 15.03, which indicates a correct valuation of ZM.
Compared to the rest of the industry, the Price/Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 85.16% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.60. ZM is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 14.91, which indicates a correct valuation of ZM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 84.10% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.43. ZM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.03 | ||
| Fwd PE | 14.91 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZM is valued cheaper than 90.11% of the companies in the same industry.
ZM's Price/Free Cash Flow ratio is rather cheap when compared to the industry. ZM is cheaper than 89.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.02 | ||
| EV/EBITDA | 11.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZM does not grow enough to justify the current Price/Earnings ratio.
ZM has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)18.67
PEG (5Y)0.2
EPS Next 2Y1.36%
EPS Next 3Y2.16%
5. Dividend
5.1 Amount
No dividends for ZM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
83.1
-0.21 (-0.25%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners73.82%
Inst Owner Change-0.45%
Ins Owners0.17%
Ins Owner Change2.25%
Market Cap25.36B
Analysts72.2
Price Target90.63 (9.06%)
Short Float %2.6%
Short Ratio3.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.65%
Min EPS beat(2)2.2%
Max EPS beat(2)5.11%
EPS beat(4)4
Avg EPS beat(4)7.03%
Min EPS beat(4)2.2%
Max EPS beat(4)11.15%
EPS beat(8)8
Avg EPS beat(8)12.47%
EPS beat(12)12
Avg EPS beat(12)16.1%
EPS beat(16)15
Avg EPS beat(16)15.8%
Revenue beat(2)0
Avg Revenue beat(2)-2.16%
Min Revenue beat(2)-2.54%
Max Revenue beat(2)-1.79%
Revenue beat(4)0
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-2.54%
Max Revenue beat(4)-1.62%
Revenue beat(8)0
Avg Revenue beat(8)-1.58%
Revenue beat(12)0
Avg Revenue beat(12)-1.99%
Revenue beat(16)2
Avg Revenue beat(16)-1.37%
PT rev (1m)-2.74%
PT rev (3m)-3.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.03%
EPS NY rev (1m)0.04%
EPS NY rev (3m)0.93%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.83%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.03 | ||
| Fwd PE | 14.91 | ||
| P/S | 5.44 | ||
| P/FCF | 14.02 | ||
| P/OCF | 13.04 | ||
| P/B | 2.84 | ||
| P/tB | 2.96 | ||
| EV/EBITDA | 11.96 |
EPS(TTM)5.53
EY6.65%
EPS(NY)5.57
Fwd EY6.71%
FCF(TTM)5.93
FCFY7.13%
OCF(TTM)6.37
OCFY7.67%
SpS15.28
BVpS29.27
TBVpS28.07
PEG (NY)18.67
PEG (5Y)0.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 11.31% | ||
| ROCE | 8.95% | ||
| ROIC | 6.87% | ||
| ROICexc | 48.22% | ||
| ROICexgc | 67.25% | ||
| OM | 17.43% | ||
| PM (TTM) | 21.65% | ||
| GM | 75.79% | ||
| FCFM | 38.77% |
ROA(3y)5.63%
ROA(5y)9.55%
ROE(3y)6.98%
ROE(5y)12.42%
ROIC(3y)5.31%
ROIC(5y)8.46%
ROICexc(3y)36.3%
ROICexc(5y)N/A
ROICexgc(3y)50.43%
ROICexgc(5y)N/A
ROCE(3y)6.92%
ROCE(5y)11.03%
ROICexcg growth 3Y-24.37%
ROICexcg growth 5Y47.41%
ROICexc growth 3Y-31.14%
ROICexc growth 5Y37.92%
OM growth 3Y-12.41%
OM growth 5Y53.59%
PM growth 3Y-13.57%
PM growth 5Y43.97%
GM growth 3Y0.67%
GM growth 5Y-1.44%
F-Score7
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 111.36% | ||
| Cap/Sales | 2.93% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 207.85% | ||
| Profit Quality | 179.04% | ||
| Current Ratio | 4.56 | ||
| Quick Ratio | 4.56 | ||
| Altman-Z | 9.32 |
F-Score7
WACC10.93%
ROIC/WACC0.63
Cap/Depr(3y)124.25%
Cap/Depr(5y)194.34%
Cap/Sales(3y)2.78%
Cap/Sales(5y)3.03%
Profit Quality(3y)514.4%
Profit Quality(5y)371.14%
High Growth Momentum
Growth
EPS 1Y (TTM)6.14%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%-0.7%
EPS Next Y0.8%
EPS Next 2Y1.36%
EPS Next 3Y2.16%
EPS Next 5Y0.09%
Revenue 1Y (TTM)3.05%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%3.29%
Revenue Next Year2.73%
Revenue Next 2Y3.05%
Revenue Next 3Y3.3%
Revenue Next 5Y2.81%
EBIT growth 1Y24.97%
EBIT growth 3Y-8.56%
EBIT growth 5Y129.77%
EBIT Next Year9.73%
EBIT Next 3Y5.29%
EBIT Next 5Y3.11%
FCF growth 1Y22.89%
FCF growth 3Y7.41%
FCF growth 5Y73.91%
OCF growth 1Y21.67%
OCF growth 3Y6.61%
OCF growth 5Y66.53%