Zoom makes up almost 7% of its flagship fund, the Ark Innovation ETF, making the Cathie Wood investment its fourth-largest holding. Across all Ark Invest funds, Zoom makes up around 4.5% of the company’s holdings. Zoom Video Communications (ZM -0.85%) rewarded shareholders who bought the stock prior to the pandemic, returning 391% in 2020. The company was a clear beneficiary of the work-from-home environment, a trend that is still very evident today. Bureau of Labor statistics released in January, 11% of workers were where can i buy government bonds still teleworking as of December 2021.

As of Aug. 23, 2021, Zoom had 240,744,533 outstanding shares of Class A common stock and 56,383,369 outstanding shares of Class B common stock. Zoom’s latest fiscal year (FY) was FY 2021, which ended Jan. 31, 2021. For that period, the company reported net income of $672.3 million on revenue of $2.7 billion. Zoom’s management also views international expansion as an important opportunity.

Sales & Book Value

Zoom Video Communications‘ top institutional investors include AQR Capital Management LLC (1.85%), Pacer Advisors Inc. (1.70%), Acadian Asset Management LLC (1.59%) and Sumitomo Mitsui Trust Holdings Inc. (1.21%). Insiders that own company stock include Santiago Subotovsky, Eric S Yuan, Velchamy Sankarlingam, Shane Crehan, Aparna Bawa, Jonathan Chadwick, Carl M Eschenbach, Ryan Azus and Kelly Steckelberg. Prior to founding Zoom, Yuan was corporate vice president of engineering at Cisco, and was a founding engineer and vice president of engineering for web and videoconferencing platform Webex. As mentioned above, on Sept. 30, 2021, Five9 announced that the two parties had mutually agreed to abandon the deal. The company said that the agreement had not received the required number of votes from Five9 shareholders to approve the merger. Earlier in September, The Wall Street Journal reported that a U.S.

Should I Buy Zoom Video Communications Stock? ZM Pros and Cons Explained

Analysts are forecasting Zoom’s revenue to come in at $7.7 billion in fiscal year 2026, indicating an average annualized growth of 13% from 2022 estimates. Double-digit revenue growth for the next five years surely isn’t bad, but it doesn’t compare to the company’s 160% compound annual growth rate over the past three years. Zoom Video Communications Inc. (ZM) offers a video-first communications platform used by millions of people worldwide for both business and personal use. The platform connects people via video, phone, chat, and content sharing and can be integrated across a broad range of devices.

1. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.
2. Department of Justice-led panel, named Team Telecom, was investigating the proposed merger’s potential national security risks.
3. The company was incorporated in 2011 and is headquartered in San Jose, California.

Zoom Video Communications, Inc.

The U.S. government has been increasing its scrutiny of Zoom on several fronts. In 2020, the United States charged a China-based Zoom executive with conspiring to disrupt videoconference commemorations of the 1989 Tiananmen Square democracy protests. Zoom is also the focus of several ongoing federal investigations related to its dealings with Beijing, according to the Journal. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

Zoom shares have lost over 60% of their value in the past six months as part of a broader tech sell-off in response to rising interest rates and inflation. Revenue and earnings growth remain strong — analysts are forecasting revenue and earnings per share to grow by 54% and 46% year over year up to $4.1 billion and $4.87 per share in fiscal year 2022, respectively. Zoom has almost no debt, boasting a debt-to-equity ratio of 2% and a strong cash position of $1.3 billion.

However, Zoom has rapidly turned into a value stock that returns a respectable level of free-cash-flow growth. If Zoom can start monetizing some of the AI potential Ark Invest sees, it could inspire another bull market in its stock. During that period, its net income of $339 million surged 63% higher. Still, operating income fell during that period, and much of the gain came from $114 million in „other income,“ which consists of income from interest, foreign currency, and marketable securities. Unfortunately for Zoom bulls, that „increase“ is likely a one-time event. Between the AI tool and its expected growth in hybrid and remote knowledge workers, Ark Invest believes Zoom’s average revenue per user (ARPU) will grow by 26% yearly.

Zoom Video Communications (ZM -0.85%) is a bit of a mystery as a growth stock. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‚as-is‘ and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart’s disclaimer. Sign up for MarketBeat All Access to gain access to MarketBeat’s full suite of research tools. The company is headquartered in San Jose, Calif., and has additional offices in more than 15 locations in the United States, Europe, Asia, and Australia.

This demand pulled forward a ton of growth and warped some investors‘ views of the company’s fundamentals. The one area of modest strength is non-GAAP (adjusted) free cash flow, which increased almost 14% yearly to more than $1.1 billion in the first three quarters of 2023. That was not enough to persuade investors to buy Zoom stock, as it is up just 1% from year-ago levels. To make the decision even easier, Zoom is trading at or near its low for price-to-earnings (P/E) and price-to-sales (P/S) ratios. Whereas during the pandemic the case could be made that the company’s valuation got ahead of itself, it’s clear now that the valuation is more in line with, if not underestimating, Zoom’s fundamentals. While the growth has slowed when compared to the pandemic highs, it’s clear that Zoom is still executing and growing — and worth considering heading into 2022.

Upcoming earnings

Meetings on the platform can host as many as 1,000 participants, while webinars can scale up to as many as 50,000.

Its forward price-to-earnings (P/E) ratio is just under 14, and the price-to-sales (P/S) ratio of less than 5 is just above all-time lows. That valuation positions the stock for a massive surge if the company can stoke a recovery in revenue growth. There is one caveat worth mentioning — Zoom’s growth in the coming years is expected to let up significantly from current levels. As the pandemic unwinds and Zoom becomes a more mature company, it’s inevitable that sales growth will analysts are updating their the boeing company come down from its all-time highs.

Still, the bear estimate calls for a $700-per-share or less stock price, amounting to more than a 10-fold gain from current levels if that price target holds. As Wood and others hire the best freelance asp net mvc developers updated daily have stated, Zoom is much more than an online meeting platform. It is a comprehensive communications ecosystem that includes team chat platforms, online whiteboards, VoIP phone service, workspaces, email, and other services. And yet the business performed solidly throughout the past few years even as the stock fell. For better or worse, Zoom has become synonymous with the pandemic. Its rise to prominence and the resulting performance were tied to a massive need for video communications at the height of lockdowns.