Zoom (ZM): Assessing Valuation as Shares Remain in a Holding Pattern This Year

Zoom Communications (ZM) shares saw modest movement today, in line with a broader range-bound trend across software stocks. Investors seem focused on the company’s slow but steady revenue and net income growth over the past year, reflecting cautious optimism in the sector.

See our latest analysis for Zoom Communications.

No dramatic headlines lately, but Zoom’s share price has mostly been stuck in a holding pattern this year as investors weigh slow growth against the company’s long-term staying power. Over the past 12 months, the total shareholder return stands at just 0.18%, suggesting that momentum is steady but far from explosive right now.

If you’re watching tech stalwarts like Zoom, it could be a smart move to see what else is brewing in the sector with our See the full list for free.

With solid fundamentals but muted returns, the key question now is whether Zoom is trading below its intrinsic value or if the market has already accounted for all future growth. Could this be the right moment for investors to act?

Most Popular Narrative: 12.3% Undervalued

With the narrative fair value of $92.30 currently above the latest close at $80.96, the consensus view suggests there is still some room for upside. This prompts a closer look at the assumptions and catalysts driving this price target.

Strong and accelerating adoption of AI-powered features, such as AI Companion, Virtual Agent 2.0, and Contact Center Elite, demonstrates growing customer reliance on advanced collaboration and productivity tools. This positions Zoom at the forefront of enterprise digital transformation and has the potential to expand the addressable market, drive multi-year revenue growth, and increase recurring revenue stability.

Read the complete narrative.

Want to know what powers this bullish narrative? The secret sauce is a set of projected growth rates and future profit multiples rarely seen outside tech’s fastest movers. Ready to find out what underlying assumptions and financial leaps support that fair value figure? Dive in and see how this consensus breaks away from the crowd.

Result: Fair Value of $92.30 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifting enterprise preferences for bundled platforms and uncertain AI monetization timelines could present challenges for Zoom's future growth and test investors' confidence.

Find out about the key risks to this Zoom Communications narrative.

Build Your Own Zoom Communications Narrative

If you’re not sold on the current story or want to dig into the numbers firsthand, it only takes a few minutes to run your own analysis and shape a narrative that fits your perspective, then Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Zoom Communications.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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