ZOOM COMMUNICATIONS INC (ZM) Stock Fundamental Analysis
NASDAQ:ZM - Nasdaq - US98980L1017 - Common Stock - Currency: USD
ZM gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 286 industry peers in the Software industry. Both the health and profitability get an excellent rating, making ZM a very profitable company, without any liquidiy or solvency issues. ZM has a correct valuation and a medium growth rate. These ratings could make ZM a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year ZM was profitable.
ZM had a positive operating cash flow in the past year.
In the past 5 years ZM has always been profitable.
Each year in the past 5 years ZM had a positive operating cash flow.
1.2 Ratios
ZM has a better Return On Assets (8.81%) than 85.66% of its industry peers.
Looking at the Return On Equity, with a value of 10.84%, ZM belongs to the top of the industry, outperforming 81.00% of the companies in the same industry.
ZM has a Return On Invested Capital of 5.07%. This is in the better half of the industry: ZM outperforms 74.19% 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 12.10%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.81% | ||
| ROE | 10.84% | ||
| ROIC | 5.07% |
ROA(3y)8.64%
ROA(5y)8.05%
ROE(3y)11.14%
ROE(5y)10.68%
ROIC(3y)5.83%
ROIC(5y)5.62%
1.3 Margins
The Profit Margin of ZM (20.34%) is better than 87.46% of its industry peers.
ZM's Profit Margin has declined in the last couple of years.
ZM has a Operating Margin of 16.35%. This is amongst the best in the industry. ZM outperforms 84.23% of its industry peers.
ZM's Operating Margin has improved in the last couple of years.
The Gross Margin of ZM (75.83%) is better than 69.89% of its industry peers.
ZM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.35% | ||
| PM (TTM) | 20.34% | ||
| GM | 75.83% |
OM growth 3Y-17.13%
OM growth 5Y50.27%
PM growth 3Y-17.77%
PM growth 5YN/A
GM growth 3Y3.43%
GM growth 5Y-1.31%
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.
ZM has more shares outstanding than it did 1 year ago.
ZM has more shares outstanding than it did 5 years ago.
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.
2.2 Solvency
An Altman-Z score of 9.89 indicates that ZM is not in any danger for bankruptcy at the moment.
ZM has a Altman-Z score of 9.89. This is amongst the best in the industry. ZM outperforms 80.65% of its industry peers.
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 | 9.89 |
ROIC/WACC0.46
WACC11.02%
2.3 Liquidity
A Current Ratio of 4.60 indicates that ZM has no problem at all paying its short term obligations.
The Current ratio of ZM (4.60) is better than 86.02% of its industry peers.
ZM has a Quick Ratio of 4.60. This indicates that ZM is financially healthy and has no problem in meeting its short term obligations.
ZM's Quick ratio of 4.60 is amongst the best of the industry. ZM outperforms 86.02% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.6 | ||
| Quick Ratio | 4.6 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.58% over the past year.
Measured over the past years, ZM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.09% on average per year.
The Revenue has been growing slightly by 2.87% in the past year.
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.
EPS 1Y (TTM)10.58%
EPS 3Y16.09%
EPS 5YN/A
EPS Q2Q%6.98%
Revenue 1Y (TTM)2.87%
Revenue growth 3Y19.52%
Revenue growth 5Y68.78%
Sales Q2Q%3.59%
3.2 Future
The Earnings Per Share is expected to grow by 2.09% on average over the next years.
ZM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.85% yearly.
EPS Next Y7.71%
EPS Next 2Y2.98%
EPS Next 3Y2.44%
EPS Next 5Y2.09%
Revenue Next Year3.29%
Revenue Next 2Y3.23%
Revenue Next 3Y3.27%
Revenue Next 5Y3.85%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
ZM is valuated correctly with a Price/Earnings ratio of 15.76.
Compared to the rest of the industry, the Price/Earnings ratio of ZM indicates a rather cheap valuation: ZM is cheaper than 86.02% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.51. ZM is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 15.80 indicates a correct valuation of ZM.
ZM's Price/Forward Earnings ratio is rather cheap when compared to the industry. ZM is cheaper than 86.38% of the companies in the same industry.
ZM is valuated cheaply when we compare the Price/Forward Earnings ratio to 93.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.76 | ||
| Fwd PE | 15.8 |
4.2 Price Multiples
88.17% of the companies in the same industry are more expensive than ZM, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, ZM is valued cheaply inside the industry as 91.76% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.51 | ||
| EV/EBITDA | 14.44 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZM does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of ZM may justify a higher PE ratio.
PEG (NY)2.04
PEG (5Y)N/A
EPS Next 2Y2.98%
EPS Next 3Y2.44%
5. Dividend
5.1 Amount
ZM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ZOOM COMMUNICATIONS INC
NASDAQ:ZM (1/30/2025, 8:00:02 PM)
After market: 88 +0.71 (+0.81%)87.29
+0.09 (+0.1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners68.95%
Inst Owner Change-0.09%
Ins Owners4.22%
Ins Owner Change2.73%
Market Cap26.75B
Analysts71.71
Price Target93.45 (7.06%)
Short Float %3.1%
Short Ratio2.42
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)6.67%
Min EPS beat(2)2.2%
Max EPS beat(2)11.15%
EPS beat(4)4
Avg EPS beat(4)10.6%
Min EPS beat(4)2.2%
Max EPS beat(4)19.39%
EPS beat(8)8
Avg EPS beat(8)17.72%
EPS beat(12)12
Avg EPS beat(12)17.14%
EPS beat(16)15
Avg EPS beat(16)18.6%
Revenue beat(2)0
Avg Revenue beat(2)-1.8%
Min Revenue beat(2)-1.81%
Max Revenue beat(2)-1.79%
Revenue beat(4)0
Avg Revenue beat(4)-1.7%
Min Revenue beat(4)-1.81%
Max Revenue beat(4)-1.59%
Revenue beat(8)0
Avg Revenue beat(8)-1.43%
Revenue beat(12)0
Avg Revenue beat(12)-1.82%
Revenue beat(16)3
Avg Revenue beat(16)-0.87%
PT rev (1m)1.29%
PT rev (3m)21.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.06%
EPS NY rev (1m)0%
EPS NY rev (3m)1.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.5%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.76 | ||
| Fwd PE | 15.8 | ||
| P/S | 5.78 | ||
| P/FCF | 15.51 | ||
| P/OCF | 14.29 | ||
| P/B | 3.08 | ||
| P/tB | 3.2 | ||
| EV/EBITDA | 14.44 |
EPS(TTM)5.54
EY6.35%
EPS(NY)5.53
Fwd EY6.33%
FCF(TTM)5.63
FCFY6.45%
OCF(TTM)6.11
OCFY7%
SpS15.1
BVpS28.32
TBVpS27.32
PEG (NY)2.04
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.81% | ||
| ROE | 10.84% | ||
| ROCE | 8.57% | ||
| ROIC | 5.07% | ||
| ROICexc | 39.77% | ||
| ROICexgc | 54.73% | ||
| OM | 16.35% | ||
| PM (TTM) | 20.34% | ||
| GM | 75.83% | ||
| FCFM | 37.28% |
ROA(3y)8.64%
ROA(5y)8.05%
ROE(3y)11.14%
ROE(5y)10.68%
ROIC(3y)5.83%
ROIC(5y)5.62%
ROICexc(3y)53.51%
ROICexc(5y)N/A
ROICexgc(3y)61.51%
ROICexgc(5y)N/A
ROCE(3y)9.87%
ROCE(5y)9.51%
ROICexcg growth 3YN/A
ROICexcg growth 5Y26.91%
ROICexc growth 3YN/A
ROICexc growth 5Y17.67%
OM growth 3Y-17.13%
OM growth 5Y50.27%
PM growth 3Y-17.77%
PM growth 5YN/A
GM growth 3Y3.43%
GM growth 5Y-1.31%
F-Score8
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 127.28% | ||
| Cap/Sales | 3.17% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 214.66% | ||
| Profit Quality | 183.3% | ||
| Current Ratio | 4.6 | ||
| Quick Ratio | 4.6 | ||
| Altman-Z | 9.89 |
F-Score8
WACC11.02%
ROIC/WACC0.46
Cap/Depr(3y)187.82%
Cap/Depr(5y)218.66%
Cap/Sales(3y)2.99%
Cap/Sales(5y)3.67%
Profit Quality(3y)490.11%
Profit Quality(5y)439.64%
High Growth Momentum
Growth
EPS 1Y (TTM)10.58%
EPS 3Y16.09%
EPS 5YN/A
EPS Q2Q%6.98%
EPS Next Y7.71%
EPS Next 2Y2.98%
EPS Next 3Y2.44%
EPS Next 5Y2.09%
Revenue 1Y (TTM)2.87%
Revenue growth 3Y19.52%
Revenue growth 5Y68.78%
Sales Q2Q%3.59%
Revenue Next Year3.29%
Revenue Next 2Y3.23%
Revenue Next 3Y3.27%
Revenue Next 5Y3.85%
EBIT growth 1Y114.77%
EBIT growth 3Y-0.95%
EBIT growth 5Y153.63%
EBIT Next Year10.77%
EBIT Next 3Y4.82%
EBIT Next 5Y4%
FCF growth 1Y46.48%
FCF growth 3Y2.04%
FCF growth 5Y134.4%
OCF growth 1Y45.33%
OCF growth 3Y2.81%
OCF growth 5Y98.95%