ZOOM COMMUNICATIONS INC (ZM) Stock Fundamental Analysis
USA - NASDAQ:ZM - US98980L1017 - Common Stock
78.96 USD
-1.75 (-2.17%)
ZM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 281 industry peers in the Software industry. ZM gets an excellent profitability rating and is at the same time showing great financial health properties. ZM is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make ZM a good candidate for value and quality investing.
1. Profitability
1.1 Basic Checks
In the past year ZM was profitable.
In the past year ZM had a positive cash flow from operations.
Each year in the past 5 years ZM has 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 10.76%, ZM belongs to the top of the industry, outperforming 86.48% of the companies in the same industry.
ZM's Return On Equity of 13.27% is fine compared to the rest of the industry. ZM outperforms 77.22% of its industry peers.
The Return On Invested Capital of ZM (8.34%) is better than 79.36% 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 12.04%.
The 3 year average ROIC (5.31%) for ZM is below the current ROIC(8.34%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.76% | ||
| ROE | 13.27% | ||
| ROIC | 8.34% |
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
Looking at the Profit Margin, with a value of 24.99%, ZM belongs to the top of the industry, outperforming 88.26% of the companies in the same industry.
In the last couple of years the Profit Margin of ZM has grown nicely.
With an excellent Operating Margin value of 20.81%, ZM belongs to the best of the industry, outperforming 86.83% of the companies in the same industry.
In the last couple of years the Operating Margin of ZM has grown nicely.
The Gross Margin of ZM (76.38%) is better than 71.89% of its industry peers.
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 | 20.81% | ||
| PM (TTM) | 24.99% | ||
| GM | 76.38% |
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.
Compared to 1 year ago, ZM has less shares outstanding
The number of shares outstanding for ZM has been increased compared to 5 years ago.
ZM has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
ZM has an Altman-Z score of 8.94. This indicates that ZM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZM (8.94) is better than 86.12% 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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 8.94 |
ROIC/WACC0.75
WACC11.06%
2.3 Liquidity
A Current Ratio of 4.45 indicates that ZM has no problem at all paying its short term obligations.
ZM has a better Current ratio (4.45) than 85.77% of its industry peers.
ZM has a Quick Ratio of 4.45. This indicates that ZM is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of ZM (4.45) is better than 85.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.45 | ||
| Quick Ratio | 4.45 |
3. Growth
3.1 Past
ZM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.50%.
The Earnings Per Share has been growing by 73.67% on average over the past years. This is a very strong growth
Looking at the last year, ZM shows a small growth in Revenue. The Revenue has grown by 3.63% in the last 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)5.5%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%10.07%
Revenue 1Y (TTM)3.63%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%4.71%
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 3.61% on average per year.
ZM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.67% yearly.
EPS Next Y9.39%
EPS Next 2Y4.93%
EPS Next 3Y4.81%
EPS Next 5Y3.61%
Revenue Next Year3.71%
Revenue Next 2Y3.53%
Revenue Next 3Y3.56%
Revenue Next 5Y3.67%
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
ZM is valuated correctly with a Price/Earnings ratio of 13.73.
Based on the Price/Earnings ratio, ZM is valued cheaper than 81.85% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.47, ZM is valued a bit cheaper.
With a Price/Forward Earnings ratio of 12.97, ZM is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 81.85% of the companies listed in the same industry.
ZM's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 35.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.73 | ||
| Fwd PE | 12.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZM is valued cheaply inside the industry as 91.10% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ZM is valued cheaply inside the industry as 87.90% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.81 | ||
| EV/EBITDA | 8.72 |
4.3 Compensation for Growth
ZM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of ZM may justify a higher PE ratio.
PEG (NY)1.46
PEG (5Y)0.19
EPS Next 2Y4.93%
EPS Next 3Y4.81%
5. Dividend
5.1 Amount
ZM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ZM (11/20/2025, 12:37:50 PM)
78.96
-1.75 (-2.17%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.7%
Inst Owner Change4.37%
Ins Owners0.2%
Ins Owner Change4.68%
Market Cap23.63B
Revenue(TTM)4.75B
Net Income(TTM)1.19B
Analysts73.33
Price Target94.62 (19.83%)
Short Float %2.54%
Short Ratio2.57
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)7.41%
Min EPS beat(2)6.23%
Max EPS beat(2)8.59%
EPS beat(4)4
Avg EPS beat(4)5.53%
Min EPS beat(4)2.2%
Max EPS beat(4)8.59%
EPS beat(8)8
Avg EPS beat(8)9.69%
EPS beat(12)12
Avg EPS beat(12)15.45%
EPS beat(16)15
Avg EPS beat(16)14.01%
Revenue beat(2)0
Avg Revenue beat(2)-1.77%
Min Revenue beat(2)-2.19%
Max Revenue beat(2)-1.36%
Revenue beat(4)0
Avg Revenue beat(4)-1.97%
Min Revenue beat(4)-2.54%
Max Revenue beat(4)-1.36%
Revenue beat(8)0
Avg Revenue beat(8)-1.8%
Revenue beat(12)0
Avg Revenue beat(12)-1.68%
Revenue beat(16)0
Avg Revenue beat(16)-1.75%
PT rev (1m)0.55%
PT rev (3m)2.31%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.49%
EPS NY rev (1m)0.02%
EPS NY rev (3m)5.13%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.16%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.73 | ||
| Fwd PE | 12.97 | ||
| P/S | 4.97 | ||
| P/FCF | 12.81 | ||
| P/OCF | 12.35 | ||
| P/B | 2.64 | ||
| P/tB | 2.75 | ||
| EV/EBITDA | 8.72 |
EPS(TTM)5.75
EY7.28%
EPS(NY)6.09
Fwd EY7.71%
FCF(TTM)6.16
FCFY7.81%
OCF(TTM)6.39
OCFY8.09%
SpS15.88
BVpS29.9
TBVpS28.7
PEG (NY)1.46
PEG (5Y)0.19
Graham Number62.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.76% | ||
| ROE | 13.27% | ||
| ROCE | 10.88% | ||
| ROIC | 8.34% | ||
| ROICexc | 57.57% | ||
| ROICexgc | 79.2% | ||
| OM | 20.81% | ||
| PM (TTM) | 24.99% | ||
| GM | 76.38% | ||
| FCFM | 38.81% |
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%
ROICexgc growth 3Y-24.37%
ROICexgc 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 Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 50.75% | ||
| Cap/Sales | 1.43% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 170.26% | ||
| Profit Quality | 155.27% | ||
| Current Ratio | 4.45 | ||
| Quick Ratio | 4.45 | ||
| Altman-Z | 8.94 |
F-Score7
WACC11.06%
ROIC/WACC0.75
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)5.5%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%10.07%
EPS Next Y9.39%
EPS Next 2Y4.93%
EPS Next 3Y4.81%
EPS Next 5Y3.61%
Revenue 1Y (TTM)3.63%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%4.71%
Revenue Next Year3.71%
Revenue Next 2Y3.53%
Revenue Next 3Y3.56%
Revenue Next 5Y3.67%
EBIT growth 1Y33.08%
EBIT growth 3Y-8.56%
EBIT growth 5Y129.77%
EBIT Next Year12.29%
EBIT Next 3Y6.66%
EBIT Next 5Y5.98%
FCF growth 1Y62.69%
FCF growth 3Y7.41%
FCF growth 5Y73.91%
OCF growth 1Y51.66%
OCF growth 3Y6.61%
OCF growth 5Y66.53%
ZOOM COMMUNICATIONS INC / ZM FAQ
What is the ChartMill fundamental rating of ZOOM COMMUNICATIONS INC (ZM) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ZM.
What is the valuation status for ZM stock?
ChartMill assigns a valuation rating of 7 / 10 to ZOOM COMMUNICATIONS INC (ZM). This can be considered as Undervalued.
What is the profitability of ZM stock?
ZOOM COMMUNICATIONS INC (ZM) has a profitability rating of 8 / 10.
How financially healthy is ZOOM COMMUNICATIONS INC?
The financial health rating of ZOOM COMMUNICATIONS INC (ZM) is 9 / 10.