ZOOM COMMUNICATIONS INC (ZM) Stock Fundamental Analysis
NASDAQ:ZM - Nasdaq - US98980L1017 - Common Stock - Currency: USD
Overall ZM gets a fundamental rating of 7 out of 10. We evaluated ZM against 285 industry peers in the Software industry. ZM gets an excellent profitability rating and is at the same time showing great financial health properties. A decent growth rate in combination with a cheap valuation! Better keep an eye on ZM. These ratings could make ZM a good candidate for value and quality investing.
1. Profitability
1.1 Basic Checks
In the past year ZM was profitable.
In the past year ZM had a positive cash flow from operations.
In the past 5 years ZM has always been profitable.
ZM had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZM has a Return On Assets of 9.19%. This is amongst the best in the industry. ZM outperforms 85.26% of its industry peers.
ZM has a Return On Equity of 11.31%. This is in the better half of the industry: ZM outperforms 79.30% of its industry peers.
ZM's Return On Invested Capital of 6.87% is fine compared to the rest of the industry. ZM outperforms 79.65% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ZM is significantly below the industry average of 11.25%.
The 3 year average ROIC (5.31%) for ZM is below the current ROIC(6.87%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 11.31% | ||
| ROIC | 6.87% |
ROA(3y)5.63%
ROA(5y)9.55%
ROE(3y)6.98%
ROE(5y)12.42%
ROIC(3y)5.31%
ROIC(5y)8.46%
1.3 Margins
The Profit Margin of ZM (21.65%) is better than 86.67% of its industry peers.
In the last couple of years the Profit Margin of ZM has grown nicely.
ZM has a Operating Margin of 17.43%. This is amongst the best in the industry. ZM outperforms 84.91% of its industry peers.
In the last couple of years the Operating Margin of ZM has grown nicely.
Looking at the Gross Margin, with a value of 75.79%, ZM is in the better half of the industry, outperforming 70.88% of the companies in the same industry.
In the last couple of years the Gross Margin of ZM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.43% | ||
| PM (TTM) | 21.65% | ||
| GM | 75.79% |
OM growth 3Y-12.41%
OM growth 5Y53.59%
PM growth 3Y-13.57%
PM growth 5Y43.97%
GM growth 3Y0.67%
GM growth 5Y-1.44%
2. Health
2.1 Basic Checks
ZM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ZM has been reduced compared to 1 year ago.
ZM has more shares outstanding than it did 5 years ago.
ZM has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 8.27 indicates that ZM is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 8.27, ZM belongs to the top of the industry, outperforming 82.81% of the companies in the same industry.
ZM has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 8.27 |
ROIC/WACC0.63
WACC10.9%
2.3 Liquidity
A Current Ratio of 4.56 indicates that ZM has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 4.56, ZM belongs to the top of the industry, outperforming 82.11% of the companies in the same industry.
A Quick Ratio of 4.56 indicates that ZM has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 4.56, ZM belongs to the top of the industry, outperforming 82.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.56 | ||
| Quick Ratio | 4.56 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.14% over the past year.
ZM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 73.67% yearly.
Looking at the last year, ZM shows a small growth in Revenue. The Revenue has grown by 3.05% in the last year.
The Revenue has been growing by 49.60% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)6.14%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%-0.7%
Revenue 1Y (TTM)3.05%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%3.29%
3.2 Future
Based on estimates for the next years, ZM will show a small growth in Earnings Per Share. The EPS will grow by 0.09% on average per year.
ZM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.81% yearly.
EPS Next Y0.77%
EPS Next 2Y1.34%
EPS Next 3Y2.16%
EPS Next 5Y0.09%
Revenue Next Year2.9%
Revenue Next 2Y3.12%
Revenue Next 3Y3.4%
Revenue Next 5Y2.81%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.93, ZM is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 86.67% 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 28.29.
ZM is valuated correctly with a Price/Forward Earnings ratio of 12.83.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 86.67% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.08, ZM is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.93 | ||
| Fwd PE | 12.83 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ZM is valued cheaper than 92.28% of the companies in the same industry.
92.28% of the companies in the same industry are more expensive than ZM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.06 | ||
| EV/EBITDA | 8.11 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ZM may justify a higher PE ratio.
PEG (NY)16.86
PEG (5Y)0.18
EPS Next 2Y1.34%
EPS Next 3Y2.16%
5. Dividend
5.1 Amount
No dividends for ZM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
71.49
+0.29 (+0.41%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners73.82%
Inst Owner Change-0.1%
Ins Owners0.17%
Ins Owner Change2.7%
Market Cap21.82B
Analysts71.9
Price Target93.19 (30.35%)
Short Float %2.56%
Short Ratio2.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.65%
Min EPS beat(2)2.2%
Max EPS beat(2)5.11%
EPS beat(4)4
Avg EPS beat(4)7.03%
Min EPS beat(4)2.2%
Max EPS beat(4)11.15%
EPS beat(8)8
Avg EPS beat(8)12.47%
EPS beat(12)12
Avg EPS beat(12)16.1%
EPS beat(16)15
Avg EPS beat(16)15.8%
Revenue beat(2)0
Avg Revenue beat(2)-2.16%
Min Revenue beat(2)-2.54%
Max Revenue beat(2)-1.79%
Revenue beat(4)0
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-2.54%
Max Revenue beat(4)-1.62%
Revenue beat(8)0
Avg Revenue beat(8)-1.58%
Revenue beat(12)0
Avg Revenue beat(12)-1.99%
Revenue beat(16)2
Avg Revenue beat(16)-1.37%
PT rev (1m)-0.25%
PT rev (3m)-0.28%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.35%
EPS NY rev (1m)0.92%
EPS NY rev (3m)0.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.83%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.93 | ||
| Fwd PE | 12.83 | ||
| P/S | 4.68 | ||
| P/FCF | 12.06 | ||
| P/OCF | 11.22 | ||
| P/B | 2.44 | ||
| P/tB | 2.55 | ||
| EV/EBITDA | 8.11 |
EPS(TTM)5.53
EY7.74%
EPS(NY)5.57
Fwd EY7.79%
FCF(TTM)5.93
FCFY8.29%
OCF(TTM)6.37
OCFY8.91%
SpS15.28
BVpS29.27
TBVpS28.07
PEG (NY)16.86
PEG (5Y)0.18
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.19% | ||
| ROE | 11.31% | ||
| ROCE | 8.95% | ||
| ROIC | 6.87% | ||
| ROICexc | 48.22% | ||
| ROICexgc | 67.25% | ||
| OM | 17.43% | ||
| PM (TTM) | 21.65% | ||
| GM | 75.79% | ||
| FCFM | 38.77% |
ROA(3y)5.63%
ROA(5y)9.55%
ROE(3y)6.98%
ROE(5y)12.42%
ROIC(3y)5.31%
ROIC(5y)8.46%
ROICexc(3y)36.3%
ROICexc(5y)N/A
ROICexgc(3y)50.43%
ROICexgc(5y)N/A
ROCE(3y)6.92%
ROCE(5y)11.03%
ROICexcg growth 3Y-24.37%
ROICexcg growth 5Y47.41%
ROICexc growth 3Y-31.14%
ROICexc growth 5Y37.92%
OM growth 3Y-12.41%
OM growth 5Y53.59%
PM growth 3Y-13.57%
PM growth 5Y43.97%
GM growth 3Y0.67%
GM growth 5Y-1.44%
F-Score7
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 111.36% | ||
| Cap/Sales | 2.93% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 207.85% | ||
| Profit Quality | 179.04% | ||
| Current Ratio | 4.56 | ||
| Quick Ratio | 4.56 | ||
| Altman-Z | 8.27 |
F-Score7
WACC10.9%
ROIC/WACC0.63
Cap/Depr(3y)124.25%
Cap/Depr(5y)194.34%
Cap/Sales(3y)2.78%
Cap/Sales(5y)3.03%
Profit Quality(3y)514.4%
Profit Quality(5y)371.14%
High Growth Momentum
Growth
EPS 1Y (TTM)6.14%
EPS 3Y2.87%
EPS 5Y73.67%
EPS Q2Q%-0.7%
EPS Next Y0.77%
EPS Next 2Y1.34%
EPS Next 3Y2.16%
EPS Next 5Y0.09%
Revenue 1Y (TTM)3.05%
Revenue growth 3Y4.4%
Revenue growth 5Y49.6%
Sales Q2Q%3.29%
Revenue Next Year2.9%
Revenue Next 2Y3.12%
Revenue Next 3Y3.4%
Revenue Next 5Y2.81%
EBIT growth 1Y24.97%
EBIT growth 3Y-8.56%
EBIT growth 5Y129.77%
EBIT Next Year9.73%
EBIT Next 3Y5.29%
EBIT Next 5Y3.11%
FCF growth 1Y22.89%
FCF growth 3Y7.41%
FCF growth 5Y73.91%
OCF growth 1Y21.67%
OCF growth 3Y6.61%
OCF growth 5Y66.53%