Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. High-growth stocks tend to represent the technology, healthcare, and communications sectors. They rarely distribute dividends to shareholders, opting for reinvestment in their businesses. More value-oriented stocks tend to represent financial services, utilities, and energy stocks. These are established companies that reliably pay dividends. 21 Wall Street analysts have issued “buy,” “hold,” and “sell” ratings for Zoom Video Communications in the last twelve months.
Style is an investment factor that has a meaningful impact on investment risk and returns. Style is calculated by combining value and growth scores, which are first individually calculated. Morningstar analysts hand-select direct competitors or comparable companies to
provide context on the strength and durability of ZOOM’s
competitive advantage. Meetings on the platform can host as many as 1,000 participants, while webinars can scale up to as many as 50,000.
The company was established in 2011 and is headquartered in San Jose, California, United States. However, full-year growth of 50% implies a massive slowdown from the 191% year-over-year rate just posted in Q1. Zoom’s management often what is quant trading underpromises and overdelivers, but the current guidance nevertheless indicates growth will dip below 50% later this year. Given shares now trade for some 24 times full-year 2022 sales, this is no cheap cloud computing stock.
Zoom Video Communications Inc (NASDAQ:ZM)
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- It’s been an incredible run as both businesses and individual users flock to the platform.
- I believe the reason for Zoom’s success — and its enduring growth story — is more about how efficient video communications are and less about the pandemic.
- Sure, COVID-19 was a positive catalyst for Zoom, but it merely accelerated adoption of video conferencing.
- Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
He started out with WebEx Communications and eventually became its vice president of engineering. A “Zoom Meeting” refers to a videoconferencing session hosted on its cloud infrastructure. Paid Zoom business plans cost $15 or $20 per employee and require minimums of 10 or 50 seats.
Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. Zoom makes money by selling its platform subscriptions to everyone from single users to companies with hundreds of thousands of employees. Unlike some other firms, Zoom went into its IPO as a profitable company. As mentioned above, on Sept. 30, 2021, Five9 announced that the two parties had mutually agreed to abandon the deal.
What’s Happening With Zoom’s Acquisition of Five9?
(New to this? See how to open a brokerage account.) In short, you’ll want to look for a broker that has a low account minimum, no trade commissions and a user-friendly trading platform. Zoom remains popular in workplaces, though its stock price has dropped considerably since the early days of the pandemic. Read on to find out how to evaluate Zoom stock and decide whether to buy. ZOOM’s beta can be found in Trading Information at the top of this page. A stock’s beta measures how closely tied its price movements have been to the performance of the overall market. The U.S. government has been increasing its scrutiny of Zoom on several fronts.
If you think prices will decrease, you can open a short position (SELL). The efforts surrounding the Snom M500 to the reseller channel are a testament to this commitment. Nonetheless, Zoom’s success is no fluke – there’s a reason it was valued at $1 billion three years ago.
Business
This looming slowdown has more to do with the company lapping results from a year ago when revenue was growing more than 300%. Not only is Zoom holding on to most of its new pandemic-era customers, it’s still forecasting a more than respectable rate of expansion. Zoom Video Communications (ZM 0.24%) just reported another quarter of incredible user growth.
But profitability is just one factor investors should consider before buying a stock. Spend some face time with Zoom’s most recent annual report as well as its S-1 filing, both available on its investor relations website. These are a treasure trove of information about the company’s operations, financials, customers, case studies, leadership team, challenges and growth relative purchasing power parity opportunities. In other words, all the things that can help investors determine if Zoom is a worthy addition to their portfolio. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only.
Zoom Video Communications Inc News
There are currently 1 sell rating, 15 hold ratings and 5 buy ratings for the stock. The consensus among Wall Street analysts is that investors should “hold” ZM shares. A hold rating indicates that analysts believe investors should maintain any existing positions they have in ZM, but not buy additional shares or sell existing shares. Zoom’s emergence as the breakout videoconferencing service, just in time to capitalize on rocketing demand during the COVID-19 pandemic, makes it one of 2021’s biggest success stories. Unsurprisingly, such a huge surge in users has seen Zoom stock, well, zoom.
Zoom Video Communications, Inc. key financial stats and ratios
In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Zoom Video Communications MarketRank™ Forecast
If you want to buy Zoom stock (ZM), eToro makes it easy to purchase the underlying asset by opening a long (BUY) position. If you’re looking to invest in Zoom, we advise creating a stock account with one of our recommended online brokers. For traders outside the United States, our top pick is eToro.