In order to do this, businesses need the cash que es un broker 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 two-year basis, we see just how remarkable the growth of its business is.
Sort by estimates, projected upside, profit surprises, and more to easily find new stocks to invest in or check up on your portfolio. Enterprise revenue was up 5.8% year-over-year, while online revenue was flat year-over-year. Zoom, which changed its name from Zoom Video Communications to Zoom Communications on Monday, ended the quarter with approximately 192,400 enterprise customers. Online monthly average churn reached an all-time low of 2.7% in the quarter. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. 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.
Has Zoom (ZM) ever split its stock?
- Across all Ark Invest funds, Zoom makes up around 4.5% of the company’s holdings.
- Zoom has provided investors with spectacular growth and returns in the past couple of years; however, I don’t see that continuing into the future.
- If Zoom can continue to grow internationally, it opens up plenty of new revenue opportunities.
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. Zoom Video Communication (ZM) and Agilent Technologies (A) react to their prospective earnings performances in Monday’s extended hours trading session.
ZM’s financial health
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.
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 COMMUNICATIONS INC
Given the expected slowdown in Zoom’s growth, I think it’s safe to say that the company is still trading at expensive valuation multiples. Each of these initiatives are designed to expand the business beyond the simple videoconferencing app the company became known for. Zoom Phone was called out on the most recent earnings call as having triple-digit year-over-year revenue growth, showing these new initiatives are starting to pay off. Would buying Zoom put you too deep into the technology sector? Would it tip your portfolio too far into stocks as a whole? As Wood and others have stated, Zoom is much more than an online meeting platform.
Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.
Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. Zoom expects full-year revenue of $4.656 billion to $4.661 billion versus estimates of $4.64 billion. Full-year earnings are expected to be between $5.41 and how to become a video game developer $5.43 per share versus estimates of $5.35 per share. Zoom even initiated new growth efforts, building out an artificial intelligence (AI)-driven communications ecosystem. 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.
Given the state of the company, investors should consider Zoom stock. Admittedly, investors like Ark Invest may have to adjust their expectations. With 2026 just two years away, Ark Invest’s base case estimates are looking increasingly unlikely to come to pass, and it may even fall short of the $700-per-share bear case estimate. Also, 3% revenue growth will probably not inspire growth-oriented investors.
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. 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. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, opencv introduction nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.