ZoomInfo Technologies (NASDAQ:ZI) shareholders have earned a 13% return over the last year

By
Simply Wall St
Published
January 17, 2022
NasdaqGS:ZI
Source: Shutterstock

It hasn't been the best quarter for ZoomInfo Technologies Inc. (NASDAQ:ZI) shareholders, since the share price has fallen 25% in that time. Taking a longer term view we see the stock is up over one year. But to be blunt its return of 13% fall short of what you could have got from an index fund (around 15%).

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

View our latest analysis for ZoomInfo Technologies

While ZoomInfo Technologies made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last twelve months, ZoomInfo Technologies' revenue grew by 55%. That's a head and shoulders above most loss-making companies. Let's face it the 13% share price gain in that time is underwhelming compared to the growth. When revenue spikes but the share price doesn't we can't help wondering if the market is missing something. It's possible that the market is worried about the losses, or simply that the growth was already priced in. Or, this could be worth adding to your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
NasdaqGS:ZI Earnings and Revenue Growth January 17th 2022

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for ZoomInfo Technologies in this interactive graph of future profit estimates.

A Different Perspective

ZoomInfo Technologies shareholders have gained 13% for the year. While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 15%. Unfortunately the share price is down 25% over the last quarter. It's possible that this is just a short term share price setback. If the business executes and delivers key metric growth, it could definitely be worth putting on your watchlist. It's always interesting to track share price performance over the longer term. But to understand ZoomInfo Technologies better, we need to consider many other factors. Take risks, for example - ZoomInfo Technologies has 5 warning signs we think you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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