Zoom Video Communications, Inc ZM Stock Price, News, Quote & History

Taken without the noise of the past two years, Zoom is clearly a buy for existing shareholders or those investors looking to start a position. Zoom ended the last quarter with $5.4 billion in cash, cash equivalents, and marketable securities and only $97 million in debt. To that end, Zoom has recently introduced Zoom Phone, Zoom Meetings, Zoom Video Webinars, and Zoom for Home.

Finance

• Index funds and ETFs track a market index and allow you to hold stock in hundreds of different companies within one fund.
• Unfortunately for Zoom bulls, that « increase » is likely a one-time event.
• 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.
• Then there is the endorsement of Ark Investment Management’s CEO Cathie Wood, whose bold predictions regarding other tech stocks (like Tesla and Bitcoin) have come to pass.

The stock is off the lows of the session as analysts lift price targets following the print. Zoom is a member of the information technology sector and operates within the software industry. They include legacy web-based meeting service providers such as Cisco Systems Inc.’s (CSCO) WebEx and LogMeIn Inc.’s GoToMeeting.

Looking back at the last two years, there may be no stock more representative of the pandemic’s impact on the stock market than Zoom Video Communications (ZM 2.34%). After growing parabolically in 2020, the stock has come crashing back to earth and is down 45% year to date at the time of this writing. This is especially stark when compared to the S&P 500, which is up 27% on the year.

Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation multiples. With revenue and earnings growth expected to pull back in the years ahead, I wouldn’t be surprised to see growth-oriented investors exit their positions in Zoom stock. The slowdown in growth, combined with ongoing macroeconomic headwinds and geopolitical concerns, will put additional downward pressure on Zoom’s valuation for the foreseeable future. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor.

Zoom Video Communications, Inc. provides unified communications platform in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. The company was incorporated in 2011 and is headquartered in San Jose, California. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, personal finance education, top-rated podcasts, and non-profit The Motley Fool Foundation.

NASDAQ: ZMZoom Video Communications Inc Stock

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. For a company like Zoom that has been so tied in investors’ minds to the pandemic, it can be difficult to take a step back and see the forest for the trees.

Tools & Features

In order to do this, businesses need the cash to invest in research and development and capital improvements. Zoom has the balance sheet to do this and has been very active in rolling out new products. By taking out of the equation the volatility of the past two years and viewing Zoom’s performance on this Cfd trader two-year basis, we see just how remarkable the growth of its business is.

Revenue vs. Earnings

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. The company also grew free cash flow by over 1,100% in fiscal year 2021 up to $1.4 billion. The significant climb in free cash flow was a result of superb revenue growth stemming from pandemic-driven demand.

For better or worse, Zoom has become synonymous with the pandemic. Its rise to prominence and the resulting performance were tied to a massive review manias, panics, and crashes need for video communications at the height of lockdowns. This demand pulled forward a ton of growth and warped some investors’ views of the company’s fundamentals. Zoom’s cloud-based service allows people in different locations with different devices to connect face-to-face and share content via video, voice and chat. And in the COVID pandemic, people increasingly turned to the service as the work-from-home era stretched on. Zoom Video Communications Inc ZM shares are trading lower on the heels of the company’s third-quarter financial results.

Still, operating income fell during that period, and much of the gain came from $114 million in opencv introduction « 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.