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 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 may be a bit undervalued, certainly considering the very reasonable score on growth 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.
ZM had a positive operating cash flow in the past year.
In the past 5 years ZM has always been profitable.
ZM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 9.57%, ZM belongs to the best of the industry, outperforming 86.88% of the companies in the same industry.
ZM has a better Return On Equity (11.78%) than 79.43% of its industry peers.
ZM has a Return On Invested Capital of 7.22%. This is in the better half of the industry: ZM outperforms 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 12.17%.
The 3 year average ROIC (5.31%) for ZM is below the current ROIC(7.22%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.57% | ||
| ROE | 11.78% | ||
| ROIC | 7.22% |
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 22.31%, ZM belongs to the top of the industry, outperforming 90.78% 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 18.13%, ZM belongs to the best of the industry, outperforming 85.82% of the companies in the same industry.
In the last couple of years the Operating Margin of ZM has grown nicely.
ZM has a Gross Margin of 75.85%. This is in the better half of the industry: ZM outperforms 69.50% of its industry peers.
ZM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.13% | ||
| PM (TTM) | 22.31% | ||
| GM | 75.85% |
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.
ZM has more shares outstanding than it did 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 8.58. This indicates that ZM is financially healthy and has little risk of bankruptcy at the moment.
ZM has a Altman-Z score of 8.58. This is amongst the best in the industry. ZM outperforms 80.14% 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 | 8.58 |
ROIC/WACC0.65
WACC11.11%
2.3 Liquidity
A Current Ratio of 4.57 indicates that ZM has no problem at all paying its short term obligations.
With an excellent Current ratio value of 4.57, ZM belongs to the best of the industry, outperforming 86.17% of the companies in the same industry.
ZM has a Quick Ratio of 4.57. This indicates that ZM is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 4.57, ZM belongs to the best of the industry, outperforming 86.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.57 | ||
| Quick Ratio | 4.57 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.89% over the past year.
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 2.98% in the last year.
The Revenue has been growing by 49.60% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)3.89%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%5.93%
Revenue 1Y (TTM)2.98%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%2.93%
3.2 Future
The Earnings Per Share is expected to grow by 2.47% on average over the next years.
The Revenue is expected to grow by 3.06% on average over the next years.
EPS Next Y4.06%
EPS Next 2Y2.88%
EPS Next 3Y3.45%
EPS Next 5Y2.47%
Revenue Next Year3.15%
Revenue Next 2Y3.22%
Revenue Next 3Y3.33%
Revenue Next 5Y3.06%
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
The Price/Earnings ratio is 13.34, which indicates a correct valuation of ZM.
Based on the Price/Earnings ratio, ZM is valued cheaper than 88.65% of the companies in the same industry.
ZM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.54.
With a Price/Forward Earnings ratio of 12.79, ZM is valued correctly.
ZM's Price/Forward Earnings ratio is rather cheap when compared to the industry. ZM is cheaper than 89.01% of the companies 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 36.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.34 | ||
| Fwd PE | 12.79 |
4.2 Price Multiples
93.97% of the companies in the same industry are more expensive than ZM, based on the Enterprise Value to EBITDA ratio.
91.49% of the companies in the same industry are more expensive than ZM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.3 | ||
| EV/EBITDA | 8.43 |
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.
The excellent profitability rating of ZM may justify a higher PE ratio.
PEG (NY)3.29
PEG (5Y)0.18
EPS Next 2Y2.88%
EPS Next 3Y3.45%
5. Dividend
5.1 Amount
No dividends for ZM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
74.85
+0.25 (+0.34%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners74.24%
Inst Owner Change0.49%
Ins Owners0.2%
Ins Owner Change1.76%
Market Cap22.65B
Analysts72.2
Price Target92.38 (23.42%)
Short Float %2.88%
Short Ratio2.78
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)5.67%
Min EPS beat(2)5.11%
Max EPS beat(2)6.23%
EPS beat(4)4
Avg EPS beat(4)6.17%
Min EPS beat(4)2.2%
Max EPS beat(4)11.15%
EPS beat(8)8
Avg EPS beat(8)11.5%
EPS beat(12)12
Avg EPS beat(12)15.41%
EPS beat(16)15
Avg EPS beat(16)14.34%
Revenue beat(2)0
Avg Revenue beat(2)-2.36%
Min Revenue beat(2)-2.54%
Max Revenue beat(2)-2.19%
Revenue beat(4)0
Avg Revenue beat(4)-2.08%
Min Revenue beat(4)-2.54%
Max Revenue beat(4)-1.79%
Revenue beat(8)0
Avg Revenue beat(8)-1.73%
Revenue beat(12)0
Avg Revenue beat(12)-1.94%
Revenue beat(16)1
Avg Revenue beat(16)-1.66%
PT rev (1m)-0.5%
PT rev (3m)-0.87%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)1.76%
EPS NY rev (1m)0.15%
EPS NY rev (3m)3.26%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.41%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.34 | ||
| Fwd PE | 12.79 | ||
| P/S | 4.82 | ||
| P/FCF | 13.3 | ||
| P/OCF | 12.27 | ||
| P/B | 2.54 | ||
| P/tB | 2.65 | ||
| EV/EBITDA | 8.43 |
EPS(TTM)5.61
EY7.49%
EPS(NY)5.85
Fwd EY7.82%
FCF(TTM)5.63
FCFY7.52%
OCF(TTM)6.1
OCFY8.15%
SpS15.53
BVpS29.42
TBVpS28.23
PEG (NY)3.29
PEG (5Y)0.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.57% | ||
| ROE | 11.78% | ||
| ROCE | 9.41% | ||
| ROIC | 7.22% | ||
| ROICexc | 51.78% | ||
| ROICexgc | 72.67% | ||
| OM | 18.13% | ||
| PM (TTM) | 22.31% | ||
| GM | 75.85% | ||
| FCFM | 36.23% |
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 | 109.66% | ||
| Cap/Sales | 3.06% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 187.8% | ||
| Profit Quality | 162.36% | ||
| Current Ratio | 4.57 | ||
| Quick Ratio | 4.57 | ||
| Altman-Z | 8.58 |
F-Score7
WACC11.11%
ROIC/WACC0.65
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)3.89%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%5.93%
EPS Next Y4.06%
EPS Next 2Y2.88%
EPS Next 3Y3.45%
EPS Next 5Y2.47%
Revenue 1Y (TTM)2.98%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%2.93%
Revenue Next Year3.15%
Revenue Next 2Y3.22%
Revenue Next 3Y3.33%
Revenue Next 5Y3.06%
EBIT growth 1Y18.58%
EBIT growth 3Y-8.56%
EBIT growth 5Y129.77%
EBIT Next Year10.48%
EBIT Next 3Y5.55%
EBIT Next 5Y4.97%
FCF growth 1Y58.52%
FCF growth 3Y7.41%
FCF growth 5Y73.91%
OCF growth 1Y56.13%
OCF growth 3Y6.61%
OCF growth 5Y66.53%