NASDAQ:ZM is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Last update: Aug 1, 2024

Uncover the hidden value in ZOOM VIDEO COMMUNICATIONS-A (NASDAQ:ZM) as our stock screening tool recommends it as an undervalued choice. NASDAQ:ZM maintains a robust financial position and offers an attractive pricing perspective. Let's dig deeper into the analysis.

Valuation Insights: NASDAQ:ZM

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. NASDAQ:ZM was assigned a score of 7 for valuation:

Based on the Price/Earnings ratio of 11.19, the valuation of ZM can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 92.23% of the companies listed in the same industry.
ZM's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.50.
The Price/Forward Earnings ratio is 11.51, which indicates a very decent valuation of ZM.
ZM's Price/Forward Earnings ratio is rather cheap when compared to the industry. ZM is cheaper than 90.46% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.94. ZM is valued slightly cheaper when compared to this.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 95.76% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, ZM is valued cheaply inside the industry as 92.93% of the companies are valued more expensively.
ZM has a very decent profitability rating, which may justify a higher PE ratio.

Analyzing Profitability Metrics

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:ZM has achieved a 7:

ZM has a better Return On Assets (8.14%) than 86.22% of its industry peers.
With an excellent Return On Equity value of 10.10%, ZM belongs to the best of the industry, outperforming 82.69% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.54%, ZM belongs to the top of the industry, outperforming 80.21% of the companies in the same industry.
ZM has a better Profit Margin (18.37%) than 86.93% of its industry peers.
ZM's Operating Margin of 17.35% is amongst the best of the industry. ZM outperforms 87.63% of its industry peers.
ZM's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 76.33%, ZM is in the better half of the industry, outperforming 72.44% of the companies in the same industry.

How We Gauge Health for NASDAQ:ZM

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:ZM has received a 8 out of 10:

ZM has an Altman-Z score of 7.46. This indicates that ZM is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.46, ZM is in the better half of the industry, outperforming 77.03% of the companies in the same industry.
There is no outstanding debt for ZM. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
ZM has a Current Ratio of 4.46. This indicates that ZM is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 4.46, ZM belongs to the best of the industry, outperforming 83.75% of the companies in the same industry.
A Quick Ratio of 4.46 indicates that ZM has no problem at all paying its short term obligations.
The Quick ratio of ZM (4.46) is better than 83.75% of its industry peers.

Growth Analysis for NASDAQ:ZM

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:ZM has earned a 5 for growth:

ZM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.00%, which is quite impressive.
ZM shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.09% yearly.
Measured over the past years, ZM shows a very strong growth in Revenue. The Revenue has been growing by 68.78% on average per year.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of ZM for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.