NasdaqGS:ZM

Stock Analysis Report

Zoom Video Communications

Executive Summary

Zoom Video Communications, Inc. provides a video-first communications platform that delivers changes how people interact primarily in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.


Snowflake Analysis

Flawless balance sheet with acceptable track record.


Similar Companies

Share Price & News

How has Zoom Video Communications's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ZM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.9%

ZM

-2.7%

US Software

-1.1%

US Market


1 Year Return

n/a

ZM

35.1%

US Software

17.8%

US Market

Return vs Industry: Insufficient data to determine how ZM performed against the US Software industry.

Return vs Market: Insufficient data to determine how ZM performed against the US Market.


Shareholder returns

ZMIndustryMarket
7 Day11.9%-2.7%-1.1%
30 Day39.4%5.5%1.5%
90 Day35.4%12.6%6.6%
1 Yearn/a36.5%35.1%20.2%17.8%
3 Yearn/a145.5%135.2%47.5%38.1%
5 Yearn/a212.4%190.0%71.2%52.4%

Price Volatility Vs. Market

How volatile is Zoom Video Communications's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zoom Video Communications undervalued compared to its fair value and its price relative to the market?

2540.38x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ZM ($101.76) is trading above our estimate of fair value ($87.8)

Significantly Below Fair Value: ZM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ZM is poor value based on its PE Ratio (2540.4x) compared to the Software industry average (49.4x).

PE vs Market: ZM is poor value based on its PE Ratio (2540.4x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: ZM's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ZM is overvalued based on its PB Ratio (36.4x) compared to the US Software industry average (5.9x).


Next Steps

Future Growth

How is Zoom Video Communications forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

-104.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZM's earnings are forecast to decline over the next 3 years (-104.4% per year).

Earnings vs Market: ZM's earnings are forecast to decline over the next 3 years (-104.4% per year).

High Growth Earnings: ZM's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ZM's revenue (27.7% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: ZM's revenue (27.7% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ZM's Return on Equity is forecast to be low in 3 years time (7.4%).


Next Steps

Past Performance

How has Zoom Video Communications performed over the past 5 years?

89.3%

Last years revenue growth


Earnings and Revenue History

Quality Earnings: ZM has high quality earnings.

Growing Profit Margin: ZM became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: ZM has become profitable over the past 5 years, growing earnings by 0% per year.

Accelerating Growth: ZM has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ZM has become profitable in the last year, making it difficult to compare its past year earnings growth to the Software industry (18.4%).


Return on Equity

High ROE: ZM's Return on Equity (2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Zoom Video Communications's financial position?


Financial Position Analysis

Short Term Liabilities: ZM's short term assets ($1.0B) exceed its short term liabilities ($317.8M).

Long Term Liabilities: ZM's short term assets ($1.0B) exceed its long term liabilities ($97.7M).


Debt to Equity History and Analysis

Debt Level: ZM is debt free.

Reducing Debt: ZM had no debt 5 years ago.


Balance Sheet

Inventory Level: ZM has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if ZM's debt is covered by short term assets.


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: ZM is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: ZM is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Zoom Video Communications's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ZM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ZM's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ZM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ZM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ZM's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure


CEO

Eric Yuan (49yo)

8.7yrs

Tenure

US$3,025,000

Compensation

Mr. Eric S. Yuan is the Founder of Zoom Video Communications, Inc. and serves as its Chairman of the board, President and Chief Executive Officer since June 2011 and also serves as its Secretary. Mr. Yuan  ...


CEO Compensation Analysis

Compensation vs Market: Eric's total compensation ($USD3.03M) is below average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Eric's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Eric Yuan
Founder8.7yrsUS$3.03m11.15% $3.1b
Aparna Bawa
Chief Legal Officer1.4yrsUS$1.79m0.10% $29.1m
Janine Pelosi
Chief Marketing Officer0.9yrsUS$2.15m0.068% $19.2m
Kelly Steckelberg
Chief Financial Officer2.3yrsno data0.017% $4.8m
Roy Benhorin
Chief Accounting Officer & Treasurer0yrsno data0.080% $22.5m
Harry Moseley
Global Chief Information Officer1.9yrsno datano data
Tom McCallum
Head of Investor Relations0yrsno datano data
Dana Mata
Head of Business Development0yrsno datano data
Lynne Oldham
Chief People Officer0yrsno datano data
Nick Chong
Head of Global Services0yrsno datano data

1.9yrs

Average Tenure

45yo

Average Age

Experienced Management: ZM's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Eric Yuan
Founder8.7yrsUS$3.03m11.15% $3.1b
Sachin Deshpande
Board Observer0yrsno datano data
Bart Swanson
Independent Director6.5yrsno data0.031% $8.7m
Daniel Scheinman
Lead Independent Director0yrsUS$724.00k0.99% $279.5m
Carl Eschenbach
Independent Director3.3yrsno data0.047% $13.3m
Jonathan Chadwick
Independent Director2.4yrsno data0.14% $40.7m
Peter Gassner
Independent Director4.3yrsno data0.44% $122.4m
Santiago Subotovsky
Independent Director5.2yrsno data0.015% $4.1m
Kimberly Hammonds
Independent Director1.4yrsUS$861.00kno data

4.3yrs

Average Tenure

52.5yo

Average Age

Experienced Board: ZM's board of directors are considered experienced (4.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: ZM only recently listed within the past 12 months, with total shares outstanding growing by 125.1% in the past year..


Top Shareholders

Company Information

Zoom Video Communications, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Zoom Video Communications, Inc.
  • Ticker: ZM
  • Exchange: NasdaqGS
  • Founded: 2011
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$28.127b
  • Shares outstanding: 276.40m
  • Website: https://www.zoom.us

Number of Employees


Location

  • Zoom Video Communications, Inc.
  • 55 Almaden Boulevard
  • 6th Floor
  • San Jose
  • California
  • 95113
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ZMNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDApr 2019
ZOOMWBAG (Wiener Boerse AG)YesClass A Common StockATEURApr 2019
0A1OLSE (London Stock Exchange)YesClass A Common StockGBUSDApr 2019
5ZMDB (Deutsche Boerse AG)YesClass A Common StockDEEURApr 2019

Biography

Zoom Video Communications, Inc. provides a video-first communications platform that delivers changes how people interact primarily in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It connects people through frictionless video, voice, chat, and content sharing. The company’s cloud-native platform enables face-to-face video experiences and connects users across various devices and locations in a single meeting. It serves education, entertainment/media, enterprise infrastructure, finance, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries, as well as individuals. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. Zoom Video Communications, Inc. was founded in 2011 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 03:26
End of Day Share Price2020/02/21 00:00
Earnings2019/10/31
Annual Earnings2019/01/31


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.