Zoom Communications Inc.

NasdaqGS:ZM Stock Report

Market Cap: US$26.2b

Zoom Communications Valuation

Is ZM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of ZM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ZM ($83.82) is trading below our estimate of fair value ($130.86)

Significantly Below Fair Value: ZM is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ZM?

Key metric: As ZM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for ZM. This is calculated by dividing ZM's market cap by their current earnings.
What is ZM's PE Ratio?
PE Ratio27.3x
EarningsUS$941.21m
Market CapUS$26.19b

Price to Earnings Ratio vs Peers

How does ZM's PE Ratio compare to its peers?

The above table shows the PE ratio for ZM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average79.4x
TYL Tyler Technologies
106.2x16.6%US$25.4b
ANSS ANSYS
52.3x15.3%US$29.7b
PTC PTC
58.9x14.9%US$22.3b
SPLK Splunk
100.3x26.4%US$26.4b
ZM Zoom Communications
27.3x2.6%US$26.2b

Price-To-Earnings vs Peers: ZM is good value based on its Price-To-Earnings Ratio (27.3x) compared to the peer average (79.4x).

Price to Earnings Ratio vs Industry

How does ZM's PE Ratio compare vs other companies in the US Software Industry?

10 CompaniesPrice / EarningsEstimated GrowthMarket Cap
YXT YXT.COM Group Holding
2.4xn/aUS$150.19m
NISN Nisun International Enterprise Development Group
1.7xn/aUS$28.70m
NXTT Next Technology Holding
0.7xn/aUS$15.98m
ULY Urgent.ly
0.07x-13.0%US$6.36m
ZM 27.3xIndustry Avg. 40.7xNo. of Companies11PE020406080100+
10 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: ZM is good value based on its Price-To-Earnings Ratio (27.3x) compared to the US Software industry average (40.7x).

Price to Earnings Ratio vs Fair Ratio

What is ZM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ZM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio27.3x
Fair PE Ratio35.6x

Price-To-Earnings vs Fair Ratio: ZM is good value based on its Price-To-Earnings Ratio (27.3x) compared to the estimated Fair Price-To-Earnings Ratio (35.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst ZM forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$83.82
US$91.60
+9.3%
9.8%US$115.00US$70.00n/a27
Dec ’25US$82.69
US$90.67
+9.7%
9.8%US$115.00US$70.00n/a27
Nov ’25US$75.60
US$76.74
+1.5%
12.1%US$95.00US$60.00n/a26
Oct ’25US$68.64
US$76.00
+10.7%
12.4%US$95.00US$60.00n/a26
Sep ’25US$69.08
US$75.68
+9.6%
12.2%US$95.00US$60.00n/a26
Aug ’25US$58.97
US$75.87
+28.7%
13.0%US$95.00US$55.00n/a26
Jul ’25US$59.21
US$76.29
+28.9%
12.6%US$95.00US$55.00n/a26
Jun ’25US$61.34
US$76.64
+24.9%
11.9%US$95.00US$58.00n/a26
May ’25US$61.61
US$78.44
+27.3%
11.8%US$95.00US$55.00n/a27
Apr ’25US$64.73
US$78.66
+21.5%
11.9%US$95.00US$55.00n/a26
Mar ’25US$70.91
US$79.25
+11.8%
11.9%US$95.00US$55.00n/a25
Feb ’25US$64.85
US$80.29
+23.8%
13.7%US$105.00US$60.00n/a25
Jan ’25US$71.91
US$80.65
+12.2%
13.0%US$105.00US$67.00n/a25
Dec ’24US$70.29
US$80.39
+14.4%
13.1%US$105.00US$67.00US$82.6925
Nov ’24US$60.03
US$82.71
+37.8%
12.1%US$105.00US$66.00US$75.6025
Oct ’24US$69.94
US$82.91
+18.5%
11.8%US$105.00US$66.00US$68.6425
Sep ’24US$71.72
US$82.75
+15.4%
12.2%US$105.00US$66.00US$69.0824
Aug ’24US$72.91
US$83.25
+14.2%
12.8%US$105.00US$65.00US$58.9724
Jul ’24US$67.88
US$83.29
+22.7%
12.7%US$105.00US$65.00US$59.2124
Jun ’24US$67.83
US$83.86
+23.6%
12.2%US$105.00US$65.00US$61.3425
May ’24US$61.68
US$85.02
+37.8%
10.9%US$105.00US$68.00US$61.6126
Apr ’24US$73.84
US$85.02
+15.1%
10.9%US$105.00US$68.00US$64.7326
Mar ’24US$69.62
US$86.10
+23.7%
10.8%US$105.00US$68.00US$70.9125
Feb ’24US$78.11
US$85.05
+8.9%
11.1%US$105.00US$67.00US$64.8526
Jan ’24US$67.74
US$86.98
+28.4%
12.2%US$110.00US$67.00US$71.9126
Dec ’23US$77.43
US$87.54
+13.1%
12.0%US$110.00US$67.00US$70.2925

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/27 05:23
End of Day Share Price 2024/12/27 00:00
Earnings2024/10/31
Annual Earnings2024/01/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Zoom Communications Inc. is covered by 51 analysts. 31 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
null nullArgus Research Company
Joseph BonnerArgus Research Company
William PowerBaird