The company announced a new $1.5 billion share repurchase program, enough to retire 7.5% of outstanding shares at Zoom’s current price. Yes, the company topped analysts’ revenue expectations kraken trading review by $20 million, but fourth-quarter revenue grew only 3% year over year. And management guided for $4.6 billion in revenue for fiscal year 2025, just 1.6% over fiscal 2024.
- The company was incorporated in 2011 and is headquartered in San Jose, California.
- Where possible we use analyst estimates, but when these aren’t available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value.
- Zoom software gets high ratings for ease of use and simplicity following earlier video services that provided jerky images and out-of-sync audio.
- Paid Zoom business plans cost $15 or $20 per employee and require minimums of 10 or 50 seats.
- According to 21 analysts, the average rating for ZM stock is “Hold.” The 12-month stock price forecast is $77.6, which is an increase of 22.63% from the latest price.
- A rebound in revenue growth for Zoom stock depends on its success in the corporate market.
ZM stock holds an Accumulation/Distribution Rating of B-minus. That rating analyzes price and volume changes in a stock over the past 13 weeks of fbs broker review trading. Its current rating indicates more funds are buying than selling. Zoom’s latest fiscal year (FY) was FY 2021, which ended Jan. 31, 2021.
Is Zoom Video Communications, Inc. (NASDAQ:ZM) Trading At A 30% Discount?
In July 2021, Zoom Video and Five9 (FIVN), which automates call center services, announced a deal to merge. The all-stock deal was originally valued at $14.7 billion. In the business market, Zoom rivals include RingCentral (RNG), Cisco Systems (CSCO), Google and others. Growth in annual recurring revenue for business customers with contracts topping $100,000 is one metric to monitor.
Two analysts have rated the stock with a sell rating, eleven have issued a hold rating and five have issued a buy rating to the company. According to MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus price target of $77.56. The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$29b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$69.2, the company appears quite good value at a 30% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula – garbage in, garbage out.
Trade Tracker: Josh Brown sells McDonald’s and Zoom
Adjusted earnings per share of $1.42 trounced estimates of $1.15. Zoom Video (ZM) shares jumped more than 10% in extended-hours trading on Monday after the company topped analysts’ quarterly estimates and issued better-than-expected current-quarter and full-year ear… Zoom Video is racing to build more artificial intelligence tools into its business communications platform. Zoom Video recently backed off from a change in its terms of service for platform users that would have enabled it to gather data to train AI models.
Zoom’s Recent Developments
This story was reviewed by MarketBeat’s editorial team prior to publication. To see how much Wall Street is doubting Zoom, investors can use the price/earnings-to-growth (PEG) ratio, which compares a stock’s valuation to the company’s expected growth. I generally buy stocks at a PEG ratio of 1.5 or less; traditionally, a PEG ratio of 1 or less is considered a great buy. There are reasons the stock is attractive despite its struggling revenue growth. The company’s revenue didn’t grow much over the past year, but free cash flow did. It was up 27% year over year to $1.6 billion, a healthy 32% of revenue.
Zoom Video Communications, Inc provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. Zoom Video Communications’ (ZM 0.10%) stock price jumped 8% on Feb. 27 after the videoconferencing company posted its latest earnings report. For the fourth quarter of fiscal 2024, which ended on Jan. 31, its revenue rose 3% year over year to $1.15 billion and beat hycm review analysts’ estimates by $20 million. Its adjusted EPS grew 16% year over year to $1.42 and cleared the consensus forecast by $0.27 per share. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second ‘steady growth’ period.
At its annual Zoomtopia user conference in early October, the company said it will not charge customers for use of its AI Companion. Its capabilities include meeting/chat summaries and smart recordings. In fiscal 2021, Zoom’s revenue and adjusted EPS soared 326% and 854%, respectively.
ZM Stock News Headlines
Zoom earnings for the quarter ending Jan. 31 were 1.42 per share on an adjusted basis, up 16% from a year earlier. A “Zoom Meeting” refers to a videoconferencing session hosted on its cloud infrastructure. Paid Zoom business plans cost $15 or $20 per employee and require minimums of 10 or 50 seats. Sales growth slowed for the ninth-straight quarter as the company adjusts to slower product demand in the post-coronavirus emergency era. Analysts have debated when decelerating sales will hit a bottom.
Also, Zoom Video has forged new deals in the enterprise market, such as one with software maker ServiceNow (NOW). One key to Zoom’s success has been a “freemium” business model. Zoom Video aims to be a player in the contact center market with its own products and services. As the coronavirus crisis eases, retaining small businesses as well as corporate accounts will be one key to Zoom’s success.
For fiscal 2025, Zoom said it expects earnings of $4.86 per share at the midpoint of its outlook vs. estimates of $4.66 per share. The company said it expects revenue of roughly $4.6 billion vs. estimates of $4.637 billion. In the enterprise market for business customers, revenue rose 5% to $667.3 million, topping estimates of $658 million.
