ZOOM VIDEO COMMUNICATIONS-A (ZM)
US98980L1017 - Common Stock
Overall ZM gets a fundamental rating of 6 out of 10. We evaluated ZM against 276 industry peers in the Software industry. ZM scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ZM may be a bit undervalued, certainly considering the very reasonable score on growth With these ratings, ZM could be worth investigating further 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.
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
ZM has a better Return On Assets (6.42%) than 83.94% of its industry peers.
Looking at the Return On Equity, with a value of 7.95%, ZM belongs to the top of the industry, outperforming 81.02% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.33%, ZM is doing good in the industry, outperforming 78.10% of the companies in the same industry.
ZM had an Average Return On Invested Capital over the past 3 years of 5.53%. This is below the industry average of 10.12%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.42% | ||
| ROE | 7.95% | ||
| ROIC | 4.33% |
ROA(3y)8.64%
ROA(5y)8.05%
ROE(3y)11.14%
ROE(5y)10.68%
ROIC(3y)5.53%
ROIC(5y)5.44%
1.3 Margins
ZM has a better Profit Margin (14.08%) than 85.04% of its industry peers.
ZM's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 13.21%, ZM belongs to the top of the industry, outperforming 85.04% of the companies in the same industry.
ZM's Operating Margin has improved in the last couple of years.
ZM has a Gross Margin of 76.35%. This is in the better half of the industry: ZM outperforms 72.63% of its industry peers.
ZM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.21% | ||
| PM (TTM) | 14.08% | ||
| GM | 76.35% |
OM growth 3Y-22.84%
OM growth 5Y43.97%
PM growth 3Y-17.77%
PM growth 5YN/A
GM growth 3Y3.36%
GM growth 5Y-1.35%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ZM is destroying value.
ZM has more shares outstanding than it did 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 7.75. This indicates that ZM is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZM (7.75) is better than 80.66% 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 | 7.75 |
ROIC/WACC0.43
WACC9.99%
2.3 Liquidity
A Current Ratio of 4.50 indicates that ZM has no problem at all paying its short term obligations.
ZM has a Current ratio of 4.50. This is amongst the best in the industry. ZM outperforms 85.40% of its industry peers.
ZM has a Quick Ratio of 4.50. This indicates that ZM is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 4.50, ZM belongs to the best of the industry, outperforming 85.40% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.5 | ||
| Quick Ratio | 4.5 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 19.22% over the past year.
The Earnings Per Share has been growing by 16.09% on average over the past years. This is quite good.
The Revenue has been growing slightly by 3.06% in the past year.
Measured over the past years, ZM shows a very strong growth in Revenue. The Revenue has been growing by 68.78% on average per year.
EPS 1Y (TTM)19.22%
EPS 3Y16.09%
EPS 5YN/A
EPS growth Q2Q16.39%
Revenue 1Y (TTM)3.06%
Revenue growth 3Y19.52%
Revenue growth 5Y68.78%
Revenue growth Q2Q2.56%
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 2.85% on average per year.
Based on estimates for the next years, ZM will show a small growth in Revenue. The Revenue will grow by 6.25% on average per year.
EPS Next Y-2.77%
EPS Next 2Y-0.81%
EPS Next 3Y0.2%
EPS Next 5Y2.85%
Revenue Next Year2.3%
Revenue Next 2Y3.13%
Revenue Next 3Y3.69%
Revenue Next 5Y6.25%
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.
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
Based on the Price/Earnings ratio of 11.72, the valuation of ZM can be described as reasonable.
Based on the Price/Earnings ratio, ZM is valued cheaply inside the industry as 91.97% of the companies are valued more expensively.
ZM is valuated cheaply when we compare the Price/Earnings ratio to 25.20, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 12.05, ZM is valued correctly.
91.24% of the companies in the same industry are more expensive than ZM, based on the Price/Forward Earnings ratio.
ZM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.63, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.72 | ||
| Fwd PE | 12.05 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 94.53% of the companies listed in the same industry.
93.07% 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 | 12.75 | ||
| EV/EBITDA | 9.38 |
4.3 Compensation for Growth
ZM has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-0.81%
EPS Next 3Y0.2%
5. Dividend
5.1 Amount
ZM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ZOOM VIDEO COMMUNICATIONS-A
NASDAQ:ZM (4/25/2024, 7:00:03 PM)
After market: 61.69 +0.65 (+1.06%)61.04
-0.61 (-0.99%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap18.77B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.72 | ||
| Fwd PE | 12.05 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.42% | ||
| ROE | 7.95% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 13.21% | ||
| PM (TTM) | 14.08% | ||
| GM | 76.35% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 4.5 | ||
| Quick Ratio | 4.5 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)19.22%
EPS 3Y16.09%
EPS 5Y
EPS growth Q2Q
EPS Next Y-2.77%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.06%
Revenue growth 3Y19.52%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y