ZOOM COMMUNICATIONS INC (ZM) Stock Fundamental Analysis
USA - NASDAQ:ZM - US98980L1017 - Common Stock
80.01 USD
+0.18 (+0.23%)
80.02 USD
+0.01 (+0.01%)
ZM gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. Both the health and profitability get an excellent rating, making ZM a very profitable company, without any liquidiy or solvency issues. ZM scores decently on growth, while it is valued quite cheap. This could make an interesting combination. This makes ZM very considerable for value and quality investing!
1. Profitability
1.1 Basic Checks
ZM had positive earnings in the past year.
In the past year ZM had a positive cash flow from operations.
Each year in the past 5 years ZM has been profitable.
Each year in the past 5 years ZM had a positive operating cash flow.
1.2 Ratios
ZM has a Return On Assets of 10.76%. This is amongst the best in the industry. ZM outperforms 86.88% of its industry peers.
ZM has a Return On Equity of 13.27%. This is in the better half of the industry: ZM outperforms 79.08% of its industry peers.
The Return On Invested Capital of ZM (8.34%) is better than 79.43% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ZM is significantly below the industry average of 11.88%.
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
ZM has a better Profit Margin (24.99%) than 89.36% of its industry peers.
In the last couple of years the Profit Margin of ZM has grown nicely.
Looking at the Operating Margin, with a value of 20.81%, ZM belongs to the top of the industry, outperforming 86.52% of the companies in the same industry.
ZM's Operating Margin has improved in the last couple of years.
The Gross Margin of ZM (76.38%) is better than 71.28% 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
ZM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ZM has been reduced compared to 1 year ago.
ZM has more shares outstanding than it did 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
ZM has an Altman-Z score of 8.86. This indicates that ZM is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.86, ZM belongs to the best of the industry, outperforming 82.62% 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 | 8.86 |
ROIC/WACC0.74
WACC11.22%
2.3 Liquidity
A Current Ratio of 4.45 indicates that ZM has no problem at all paying its short term obligations.
The Current ratio of ZM (4.45) is better than 86.52% 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.
Looking at the Quick ratio, with a value of 4.45, ZM belongs to the top of the industry, outperforming 86.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.45 | ||
| Quick Ratio | 4.45 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.50% over the past year.
Measured over the past years, ZM shows a very strong growth in Earnings Per Share. The EPS has been growing by 73.67% on average per year.
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
ZM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.61% yearly.
The Revenue is expected to grow by 3.67% on average over the next years.
EPS Next Y9.37%
EPS Next 2Y5.07%
EPS Next 3Y5%
EPS Next 5Y3.61%
Revenue Next Year3.71%
Revenue Next 2Y3.54%
Revenue Next 3Y3.58%
Revenue Next 5Y3.67%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ZM is valuated correctly with a Price/Earnings ratio of 13.91.
Based on the Price/Earnings ratio, ZM is valued cheaper than 85.46% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.40. ZM is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 13.11, the valuation of ZM can be described as correct.
85.46% of the companies in the same industry are more expensive than ZM, based on the Price/Forward Earnings ratio.
ZM's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.91 | ||
| Fwd PE | 13.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZM is valued cheaply inside the industry as 92.55% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ZM is valued cheaply inside the industry as 90.78% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.98 | ||
| EV/EBITDA | 8.48 |
4.3 Compensation for Growth
ZM's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
ZM has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.48
PEG (5Y)0.19
EPS Next 2Y5.07%
EPS Next 3Y5%
5. Dividend
5.1 Amount
No dividends for ZM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
80.01
+0.18 (+0.23%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.7%
Inst Owner Change0.76%
Ins Owners0.2%
Ins Owner Change-1.34%
Market Cap23.95B
Analysts73
Price Target94.1 (17.61%)
Short Float %1.96%
Short Ratio1.56
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)0.67%
PT rev (3m)2.11%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)3.44%
EPS NY rev (1m)5.15%
EPS NY rev (3m)5.26%
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 | 13.91 | ||
| Fwd PE | 13.11 | ||
| P/S | 5.04 | ||
| P/FCF | 12.98 | ||
| P/OCF | 12.52 | ||
| P/B | 2.68 | ||
| P/tB | 2.79 | ||
| EV/EBITDA | 8.48 |
EPS(TTM)5.75
EY7.19%
EPS(NY)6.1
Fwd EY7.63%
FCF(TTM)6.16
FCFY7.7%
OCF(TTM)6.39
OCFY7.99%
SpS15.88
BVpS29.9
TBVpS28.7
PEG (NY)1.48
PEG (5Y)0.19
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%
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 Turnover0.43
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 | 8.86 |
F-Score7
WACC11.22%
ROIC/WACC0.74
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 Y9.37%
EPS Next 2Y5.07%
EPS Next 3Y5%
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 2Y3.54%
Revenue Next 3Y3.58%
Revenue Next 5Y3.67%
EBIT growth 1Y33.08%
EBIT growth 3Y-8.56%
EBIT growth 5Y129.77%
EBIT Next Year12.29%
EBIT Next 3Y6.58%
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%