Zoom Communications (ZM)
Market Price (5/7/2026): $104.74 | Market Cap: $31.1 BilSector: Information Technology | Industry: IT Consulting & Other Services
Zoom Communications (ZM)
Market Price (5/7/2026): $104.74Market Cap: $31.1 BilSector: Information TechnologyIndustry: IT Consulting & Other Services
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.1%, FCF Yield is 6.2% Cash is significant % of market capNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is -25% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 41%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 40% Stock buyback supportStock Buyback 3Y Total is 2.7 Bil Low stock price volatilityVol 12M is 38% Megatrend and thematic driversMegatrends include Cloud Computing, Digital Health & Telemedicine, and Future of Work. Themes include Software as a Service (SaaS), Show more. | Trading close to highsDist 52W High is -3.6%, Dist 3Y High is -3.6% Weak multi-year price returns3Y Excs Rtn is -6.3% | Significant share based compensationSBC/Rev LTMShare Based Compensation / Revenue (Sales), Last Twelve Months (LTM) is 16% Key risksZM key risks include [1] eroding customer retention due to intense competition from bundled tech giants, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 6.1%, FCF Yield is 6.2% |
| Cash is significant % of market capNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is -25% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 41%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 40% |
| Stock buyback supportStock Buyback 3Y Total is 2.7 Bil |
| Low stock price volatilityVol 12M is 38% |
| Megatrend and thematic driversMegatrends include Cloud Computing, Digital Health & Telemedicine, and Future of Work. Themes include Software as a Service (SaaS), Show more. |
| Trading close to highsDist 52W High is -3.6%, Dist 3Y High is -3.6% |
| Weak multi-year price returns3Y Excs Rtn is -6.3% |
| Significant share based compensationSBC/Rev LTMShare Based Compensation / Revenue (Sales), Last Twelve Months (LTM) is 16% |
| Key risksZM key risks include [1] eroding customer retention due to intense competition from bundled tech giants, Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Revaluation of Strategic Investment in AI Company Anthropic.
Investors revisited the potential value of Zoom's strategic investment in AI company Anthropic. An analyst at Baird highlighted that Zoom's initial 2023 investment of approximately $51 million could now translate into a multibillion-dollar stake, with estimates ranging from $2 billion to $4 billion. This re-evaluation significantly boosted investor sentiment and contributed to the stock's climb.
2. Robust Financial Position and Share Repurchases.
As of January 31, 2026, Zoom reported a strong financial position with approximately $7.8 billion in cash and marketable securities. The company also engaged in significant share repurchases during fiscal year 2026, with remaining authorization under its repurchase program, providing incremental support and amplifying positive market sentiment.
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Stock Movement Drivers
Fundamental Drivers
The 14.1% change in ZM stock from 1/31/2026 to 5/6/2026 was primarily driven by a 17.7% change in the company's Net Income Margin (%).| (LTM values as of) | 1312026 | 5062026 | Change |
|---|---|---|---|
| Stock Price ($) | 92.10 | 105.13 | 14.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,806 | 4,869 | 1.3% |
| Net Income Margin (%) | 33.2% | 39.0% | 17.7% |
| P/E Multiple | 17.3 | 16.4 | -4.9% |
| Shares Outstanding (Mil) | 299 | 297 | 0.7% |
| Cumulative Contribution | 14.1% |
Market Drivers
1/31/2026 to 5/6/2026| Return | Correlation | |
|---|---|---|
| ZM | 14.1% | |
| Market (SPY) | 3.6% | 34.0% |
| Sector (XLK) | 18.3% | 35.1% |
Fundamental Drivers
The 20.5% change in ZM stock from 10/31/2025 to 5/6/2026 was primarily driven by a 56.1% change in the company's Net Income Margin (%).| (LTM values as of) | 10312025 | 5062026 | Change |
|---|---|---|---|
| Stock Price ($) | 87.23 | 105.13 | 20.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,754 | 4,869 | 2.4% |
| Net Income Margin (%) | 25.0% | 39.0% | 56.1% |
| P/E Multiple | 22.2 | 16.4 | -25.9% |
| Shares Outstanding (Mil) | 302 | 297 | 1.7% |
| Cumulative Contribution | 20.5% |
Market Drivers
10/31/2025 to 5/6/2026| Return | Correlation | |
|---|---|---|
| ZM | 20.5% | |
| Market (SPY) | 5.5% | 32.9% |
| Sector (XLK) | 13.4% | 32.0% |
Fundamental Drivers
The 35.6% change in ZM stock from 4/30/2025 to 5/6/2026 was primarily driven by a 80.2% change in the company's Net Income Margin (%).| (LTM values as of) | 4302025 | 5062026 | Change |
|---|---|---|---|
| Stock Price ($) | 77.54 | 105.13 | 35.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,665 | 4,869 | 4.4% |
| Net Income Margin (%) | 21.7% | 39.0% | 80.2% |
| P/E Multiple | 23.5 | 16.4 | -30.3% |
| Shares Outstanding (Mil) | 307 | 297 | 3.4% |
| Cumulative Contribution | 35.6% |
Market Drivers
4/30/2025 to 5/6/2026| Return | Correlation | |
|---|---|---|
| ZM | 35.6% | |
| Market (SPY) | 30.4% | 32.3% |
| Sector (XLK) | 62.9% | 29.6% |
Fundamental Drivers
The 71.1% change in ZM stock from 4/30/2023 to 5/6/2026 was primarily driven by a 1553.1% change in the company's Net Income Margin (%).| (LTM values as of) | 4302023 | 5062026 | Change |
|---|---|---|---|
| Stock Price ($) | 61.43 | 105.13 | 71.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,393 | 4,869 | 10.8% |
| Net Income Margin (%) | 2.4% | 39.0% | 1553.1% |
| P/E Multiple | 173.5 | 16.4 | -90.5% |
| Shares Outstanding (Mil) | 293 | 297 | -1.2% |
| Cumulative Contribution | 71.1% |
Market Drivers
4/30/2023 to 5/6/2026| Return | Correlation | |
|---|---|---|
| ZM | 71.1% | |
| Market (SPY) | 78.7% | 41.7% |
| Sector (XLK) | 130.2% | 38.1% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| ZM Return | -45% | -63% | 6% | 13% | 6% | 26% | -68% |
| Peers Return | 25% | -44% | 44% | 20% | 15% | 14% | 61% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 6% | 93% |
Monthly Win Rates [3] | |||||||
| ZM Win Rate | 42% | 25% | 50% | 58% | 67% | 80% | |
| Peers Win Rate | 65% | 25% | 57% | 60% | 55% | 56% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 60% | |
Max Drawdowns [4] | |||||||
| ZM Max Drawdown | -46% | -64% | -12% | -23% | -18% | -16% | |
| Peers Max Drawdown | -14% | -50% | -8% | -11% | -24% | -19% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: MSFT, CSCO, GOOGL, RNG, CRM. See ZM Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 5/6/2026 (YTD)
How Low Can It Go
| Event | ZM | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -21.7% | -18.8% |
| % Gain to Breakeven | 27.7% | 23.1% |
| Time to Breakeven | 154 days | 79 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -14.5% | -9.5% |
| % Gain to Breakeven | 16.9% | 10.5% |
| Time to Breakeven | 35 days | 24 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -20.5% | -6.7% |
| % Gain to Breakeven | 25.7% | 7.1% |
| Time to Breakeven | 552 days | 31 days |
In The Past
Zoom Communications's stock fell -21.7% during the 2025 US Tariff Shock. Such a loss loss requires a 27.7% gain to breakeven.
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Asset Allocation
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| Event | ZM | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -21.7% | -18.8% |
| % Gain to Breakeven | 27.7% | 23.1% |
| Time to Breakeven | 154 days | 79 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -20.5% | -6.7% |
| % Gain to Breakeven | 25.7% | 7.1% |
| Time to Breakeven | 552 days | 31 days |
In The Past
Zoom Communications's stock fell -21.7% during the 2025 US Tariff Shock. Such a loss loss requires a 27.7% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Zoom Communications (ZM)
AI Analysis | Feedback
Here are 1-3 brief analogies to describe Zoom Communications (ZM):
- The Netflix for virtual meetings.
- Like Microsoft Teams or Google Meet, but built around a world-class video conferencing experience.
AI Analysis | Feedback
- Zoom Meetings: A platform offering HD video, voice, chat, and content sharing across various devices.
- Zoom Phone: An enterprise-grade cloud-based phone system.
- Zoom Chat: A messaging service enabling users to share messages, images, and content across devices.
- Zoom Rooms: A software-based conference room system for video collaboration.
- Zoom Hardware-as-a-Service: A service providing access to video communication technology using third-party equipment.
- Zoom Conference Room Connector: A gateway enabling SIP/H.323 endpoints to join Zoom meetings.
- Zoom Events: A platform for managing and hosting both internal and external virtual events.
- OnZoom: A prosumer-focused virtual event platform and marketplace for creating, hosting, and monetizing online events.
- Zoom Webinars: A service for delivering video presentations to large audiences from various devices.
- Zoom Developer Platform: A platform that enables developers to build apps and integrate Zoom's video-based communication solutions.
- Zoom App Marketplace: A marketplace for developers to publish their apps and third-party integrations for Zoom.
- Zoom Contact Center: An omnichannel contact center solution for customer service.
AI Analysis | Feedback
Zoom Communications (symbol: ZM) primarily sells its unified communications platform and related services to other companies and organizations.
The provided background information does not list the names of specific major customer companies. However, it identifies the following categories of industries that Zoom serves, which represent its major customer segments:
- Education
- Entertainment/Media
- Enterprise Infrastructure
- Finance
- Government
- Healthcare
- Manufacturing
- Non-profit/Not-for-profit and Social Impact
- Retail/Consumer Products
- Software/Internet Industries
While Zoom also serves individuals and prosumers, its primary customer base for its broader suite of offerings, including Zoom Phone, Zoom Rooms, and Zoom Contact Center, is found within these diverse organizational categories.
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- Oracle (ORCL)
- Amazon.com (AMZN)
- HP Inc. (HPQ)
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Eric S. Yuan, Founder & Chief Executive Officer
Eric S. Yuan founded Zoom in 2011. Before establishing Zoom, he served as Corporate Vice President of Engineering at Cisco. He was also a founding engineer and Vice President of Engineering at Webex, where he expanded his team from 10 to over 800 engineers and contributed to revenue growth from $0 to over $800M. Yuan departed Cisco to found Zoom after his proposal for a new smartphone-friendly video conferencing system was turned down. He initially funded Zoom by borrowing from friends and family due to a lack of investor interest. Zoom's initial public offering in 2019 was recognized as one of the highest-performing tech IPOs.
Michelle Chang, Chief Financial Officer
Michelle Chang was appointed Chief Financial Officer of Zoom, with her role effective starting October 7, 2024. Prior to joining Zoom, she held the position of Corporate Vice President and CFO of Microsoft's Commercial Sales & Partner Organization. Her extensive tenure at Microsoft included various other finance leadership roles, such as Corporate Vice President and CFO of Modern Workplace (including Office and Teams) and Cyber Security. Chang began her career as an Audit & Consulting Senior at Arthur Andersen.
Velchamy Sankarlingam, President of Product and Engineering
Velchamy Sankarlingam joined Zoom in 2020 and is responsible for leading the company's Product, Engineering, DevOps, Digital Transformation, and Support functions. Before his time at Zoom, he was the Senior Vice President of Cloud Services Development and Operations at VMware, where he managed an R&D business unit, oversaw all infrastructure (including one of the largest private clouds), and facilitated VMware's transition to a SaaS model. Earlier in his career, he served as Vice President of Engineering and Operations at Cisco, specifically for Webex. He also held Vice President positions at Webex and Presenter.com, both of which were acquired by Cisco and Webex respectively. His career also includes experience at Andersen Consulting (now Accenture), IBM, Network Computing Devices, and Standard Microsystems.
Aparna Bawa, Chief Operating Officer
Aparna Bawa serves as Zoom's Chief Operating Officer, a role she has held since May 2020, following her tenure as Chief Legal Officer. Prior to joining Zoom in 2018, she was Senior Vice President and General Counsel for Magento Commerce, which was acquired by Adobe in 2018. Earlier, as Vice President and General Counsel for Nimble Storage, she played a key role in the company's initial public offering in 2013 and its subsequent sale to Hewlett Packard Enterprise in 2017. Bawa also led legal and corporate development functions for Inphi Corp. Her background includes experience as an investment banker at Lehman Brothers and Deutsche Bank, where she managed numerous IPO and M&A transactions for technology sector clients. She began her career as a corporate and securities attorney at Wilson Sonsini Goodrich & Rosati.
Abhisht Arora, Chief Strategy Officer
Abhisht Arora joined Zoom in 2021 as Chief Strategy Officer, where he is responsible for driving key growth initiatives, monetization strategies, corporate development, and strategic planning. Before his role at Zoom, he was Vice President of Product at Microsoft Teams. Arora's career at Microsoft spanned over 20 years, during which he held senior business and product leadership positions across various divisions, including Xbox, Bing, Windows, Office, and Surface. He is credited with product innovations such as the creation of Xbox Game Pass and significantly boosting usage and revenue growth for Bing and Xbox Live.
AI Analysis | Feedback
The key risks to Zoom Communications (ZM) are:
-
Intense Competition and Market Saturation
Zoom operates in a highly competitive market against established players such as Microsoft (Teams), Google (Meet), and Cisco (Webex), which often bundle their video conferencing services with other products. This competition can lead to lower pricing, eroded market share, and increased customer acquisition costs. The market for video communications has also experienced saturation following its rapid growth during the pandemic, which could limit Zoom's future growth opportunities and make customer acquisition and retention more challenging.
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Rapid Technological Changes and AI-Related Challenges
The fast-paced evolution of technology in the communications sector, including the rise of new AI-driven solutions, poses a continuous threat to Zoom's relevance. Zoom must consistently innovate and adapt its platform to maintain its customer base and market share. Furthermore, the company's use of generative artificial intelligence (AI) in its products and services introduces new operational challenges, potential legal liabilities, reputational concerns, and competitive and regulatory risks that could adversely affect its business.
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Security, Privacy, and Regulatory Concerns
Zoom has faced significant scrutiny and investigations concerning its user privacy policies, encryption methods, and overall data security practices. Past incidents like "Zoombombing" and concerns about data breaches have raised questions about trust. While Zoom has implemented enhanced security measures and encryption protocols to address these issues, the company remains susceptible to data breaches and must continue to comply with evolving regulatory and privacy requirements across various regions to avoid potential harm to its business and legal liability.
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The increasing ubiquity and feature maturation of unified communication platforms bundled within larger enterprise software ecosystems, notably Microsoft Teams (as part of Microsoft 365) and Google Meet (as part of Google Workspace). These comprehensive offerings increasingly provide comparable video conferencing, chat, and telephony services, diminishing the perceived need for standalone subscriptions to specialized communication platforms like Zoom for many businesses already paying for these broader suites.
AI Analysis | Feedback
Zoom Communications (symbol: ZM) operates within several large addressable markets for its main products and services:
-
Unified Communications Platform (encompassing Zoom Meetings, Zoom Phone, Zoom Chat, Zoom Rooms): The global unified communications market was valued at approximately USD 136.11 billion in 2023 and is projected to reach around USD 417.86 billion by 2030, growing at a compound annual growth rate (CAGR) of 17.4% from 2024 to 2030. Other estimates place the global market at USD 146.2 billion in 2024, expected to reach USD 530.5 billion by 2033, with a CAGR of 14.63% from 2025-2033. North America accounted for 26.0% of the global unified communications market in 2023.
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Zoom Phone (Cloud Phone System): The global cloud telephony service market is projected to reach US$ 26.8 billion in 2026 and US$ 48.4 billion by 2033, exhibiting a CAGR of 8.8% between 2026 and 2033. Another estimate indicates the global cloud telephony service market size reached USD 23.9 billion in 2024 and is expected to reach USD 47.8 billion by 2033, with a CAGR of 7.99% during 2025-2033. North America leads this market, holding approximately 41% of the global market share.
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Zoom Events, OnZoom, and Zoom Webinars (Virtual Events): The global virtual events industry market was valued at $392.10 billion in 2023 and is estimated to reach $1,388.4 billion by 2035, growing at a CAGR of 11.2% from 2024 to 2035. Other reports show the global virtual events market at USD 98.07 billion in 2024, projected to reach USD 297.16 billion by 2030, with a CAGR of 20.3% from 2025 to 2030. North America held the major share of the market in 2023 and accounted for 39.8% of the global virtual events market in 2024.
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Zoom Contact Center: The global contact center software market was valued at USD 40.9 billion in 2024 and is projected to reach USD 152.4 billion by 2033, exhibiting a CAGR of 15.7% from 2025-2033. Another source indicates the global contact center software market size was worth around USD 46.18 billion in 2024 and is predicted to grow to around USD 399.41 billion by 2034, with a CAGR of roughly 21.8% between 2025 and 2034. North America dominates this market, holding over 35.7% in 2024.
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Zoom Communications (ZM) is poised for future revenue growth over the next 2-3 years, driven by several strategic initiatives and product expansions.
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Expansion and Monetization of AI-powered Solutions: Zoom is heavily investing in and expecting revenue growth from its AI-powered features, particularly the AI Companion. The strategy includes selling AI Companion as a standalone product to basic users and as an add-on for enterprise customers. This focus on AI is central to Zoom's evolution into an "AI-powered system of action for modern work" and is expected to open new revenue streams.
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Growth in Enterprise Customers and Upselling within Existing Accounts: A significant driver of revenue growth for Zoom is the continued acquisition of new enterprise customers and the expansion of services within its existing large client base. The company has seen consistent year-over-year growth in the number of customers contributing more than $100,000 in trailing 12-month revenue, which now constitutes a substantial portion of its total revenue. This focus on the up-market enterprise segment demonstrates a strategy to increase average customer spending.
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Increased Adoption and Performance of Zoom Phone and Zoom Contact Center: Zoom Phone and Zoom Contact Center (ZCC) are identified as key emerging growth businesses with strong performance. These products are driving competitive displacements and are crucial components of Zoom's broader unified communications platform, contributing significantly to future revenue acceleration.
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Platform Diversification and Ecosystem Expansion: Beyond its core video conferencing, Zoom is transforming into a comprehensive work platform encompassing products like Zoom Team Chat, Zoom Events, and Zoom Docs. This strategic shift aims to integrate various communication and collaboration tools into an "AI-first work platform," enhancing its ecosystem and creating opportunities for revenue growth through a broader suite of offerings and integrations.
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Share Repurchases
- Zoom Video Communications announced an equity buyback plan on February 26, 2024. Under this program, as of January 31, 2026, the company repurchased 36,312,622 shares for a total of $2,700 million.
- In November 2025, Zoom's Board authorized an additional $1.0 billion for share repurchases, supplementing the $310.4 million remaining authorization as of October 31, 2025.
- As of January 31, 2026, Zoom had $1.0 billion remaining in its authorized share repurchase program.
Outbound Investments
- In May 2023, Zoom Ventures made a strategic investment of $51 million in the AI startup Anthropic.
- As of March 2026, analysts estimate Zoom's stake in Anthropic could be valued as high as $4.4 billion.
- In 2021, Zoom acquired assets from Liminal to enhance its virtual event capabilities and also acquired Kites GmbH for real-time Machine Translation solutions.
Capital Expenditures
- Zoom's capital expenditures averaged $116 million annually for the fiscal years ending January 2021 to 2025.
- Capital expenditures peaked at $136.6 million in the fiscal year ending January 2025.
- For fiscal year 2027, the company forecasts normalized capital expenditures to be $785 million, with a primary focus on investing in AI and expanding offerings in areas like contact center and employee experience solutions.
Latest Trefis Analyses
Trade Ideas
Select ideas related to ZM.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 04302026 | PLTR | Palantir Technologies | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 0.0% | 0.0% | 0.0% |
| 04102026 | ADSK | Autodesk | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 8.5% | 8.5% | 0.0% |
| 04102026 | BSY | Bentley Systems | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 4.2% | 4.2% | 0.0% |
| 04102026 | ENPH | Enphase Energy | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 5.7% | 5.7% | 0.0% |
| 04102026 | BL | BlackLine | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | 3.2% | 3.2% | -3.0% |
| 10312023 | ZM | Zoom Communications | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | 1.9% | 24.7% | -7.8% |
| 09302022 | ZM | Zoom Communications | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | 0.3% | -5.0% | -17.4% |
| 03312022 | ZM | Zoom Communications | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | -36.5% | -37.0% | -44.2% |
| 09302021 | ZM | Zoom Communications | Dip Buy | DB | CFO/Rev | Low D/EDip Buy with High Cash Flow MarginsBuying dips for companies with significant cash flows from operations and reasonable debt / market cap | -55.2% | -71.9% | -72.0% |
Research & Analysis
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 143.16 |
| Mkt Cap | 265.9 |
| Rev LTM | 50,290 |
| Op Inc LTM | 11,301 |
| FCF LTM | 13,322 |
| FCF 3Y Avg | 12,490 |
| CFO LTM | 14,160 |
| CFO 3Y Avg | 13,269 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 9.3% |
| Rev Chg 3Y Avg | 9.0% |
| Rev Chg Q | 10.9% |
| QoQ Delta Rev Chg LTM | 2.7% |
| Op Inc Chg LTM | 19.9% |
| Op Inc Chg 3Y Avg | 46.6% |
| Op Mgn LTM | 23.1% |
| Op Mgn 3Y Avg | 21.9% |
| QoQ Delta Op Mgn LTM | 0.4% |
| CFO/Rev LTM | 38.5% |
| CFO/Rev 3Y Avg | 35.3% |
| FCF/Rev LTM | 22.0% |
| FCF/Rev 3Y Avg | 24.4% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 265.9 |
| P/S | 6.3 |
| P/Op Inc | 27.1 |
| P/EBIT | 24.8 |
| P/E | 27.3 |
| P/CFO | 16.9 |
| Total Yield | 4.9% |
| Dividend Yield | 0.5% |
| FCF Yield 3Y Avg | 4.9% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 17.0% |
| 3M Rtn | 14.6% |
| 6M Rtn | 27.1% |
| 12M Rtn | 46.5% |
| 3Y Rtn | 70.9% |
| 1M Excs Rtn | 5.7% |
| 3M Excs Rtn | 7.6% |
| 6M Excs Rtn | 15.6% |
| 12M Excs Rtn | 15.9% |
| 3Y Excs Rtn | -9.6% |
Comparison Analyses
Price Behavior
| Market Price | $105.13 | |
| Market Cap ($ Bil) | 31.2 | |
| First Trading Date | 04/18/2019 | |
| Distance from 52W High | -3.6% | |
| 50 Days | 200 Days | |
| DMA Price | $83.62 | $83.43 |
| DMA Trend | up | indeterminate |
| Distance from DMA | 25.7% | 26.0% |
| 3M | 1YR | |
| Volatility | 47.9% | 37.6% |
| Downside Capture | 0.58 | 0.50 |
| Upside Capture | 144.15 | 102.66 |
| Correlation (SPY) | 29.5% | 31.1% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.44 | 0.66 | 1.03 | 1.04 | 0.94 | 0.93 |
| Up Beta | 0.12 | 0.22 | 0.60 | 0.72 | 0.91 | 0.78 |
| Down Beta | -5.83 | -0.60 | -0.68 | -0.16 | 0.56 | 0.86 |
| Up Capture | 143% | 174% | 153% | 180% | 101% | 107% |
| Bmk +ve Days | 15 | 22 | 31 | 66 | 141 | 428 |
| Stock +ve Days | 16 | 27 | 35 | 65 | 129 | 387 |
| Down Capture | 351% | 69% | 176% | 140% | 113% | 103% |
| Bmk -ve Days | 4 | 18 | 30 | 56 | 108 | 321 |
| Stock -ve Days | 6 | 16 | 29 | 60 | 121 | 361 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ZM | |
|---|---|---|---|---|
| ZM | 35.3% | 37.8% | 0.88 | - |
| Sector ETF (XLK) | 59.0% | 20.6% | 2.14 | 29.6% |
| Equity (SPY) | 28.5% | 12.5% | 1.78 | 32.3% |
| Gold (GLD) | 40.6% | 27.2% | 1.23 | -3.3% |
| Commodities (DBC) | 50.9% | 18.0% | 2.20 | 1.8% |
| Real Estate (VNQ) | 12.8% | 13.5% | 0.65 | 6.4% |
| Bitcoin (BTCUSD) | -14.2% | 42.1% | -0.25 | 19.9% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ZM | |
|---|---|---|---|---|
| ZM | -19.9% | 44.0% | -0.36 | - |
| Sector ETF (XLK) | 20.1% | 24.8% | 0.72 | 49.9% |
| Equity (SPY) | 12.7% | 17.1% | 0.58 | 49.9% |
| Gold (GLD) | 21.0% | 17.9% | 0.96 | 4.6% |
| Commodities (DBC) | 13.9% | 19.1% | 0.60 | 4.3% |
| Real Estate (VNQ) | 3.5% | 18.8% | 0.09 | 34.4% |
| Bitcoin (BTCUSD) | 8.7% | 56.1% | 0.37 | 26.2% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with ZM | |
|---|---|---|---|---|
| ZM | 5.5% | 54.5% | 0.35 | - |
| Sector ETF (XLK) | 24.3% | 24.4% | 0.90 | 33.4% |
| Equity (SPY) | 14.9% | 17.9% | 0.71 | 26.1% |
| Gold (GLD) | 13.7% | 16.0% | 0.71 | 7.8% |
| Commodities (DBC) | 9.5% | 17.7% | 0.45 | 4.0% |
| Real Estate (VNQ) | 5.7% | 20.7% | 0.24 | 12.7% |
| Bitcoin (BTCUSD) | 68.4% | 66.9% | 1.07 | 14.4% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/25/2026 | -11.6% | -8.7% | -7.2% |
| 11/24/2025 | 9.8% | 9.0% | 9.8% |
| 8/21/2025 | 12.7% | 10.5% | 14.2% |
| 5/21/2025 | -0.2% | -2.8% | -6.1% |
| 2/24/2025 | -8.5% | -8.4% | -3.7% |
| 8/21/2024 | 13.0% | 17.4% | 12.1% |
| 5/20/2024 | -0.4% | -3.2% | -9.0% |
| 2/26/2024 | 8.0% | 10.4% | 5.1% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 8 | 9 | 10 |
| # Negative | 15 | 14 | 13 |
| Median Positive | 8.9% | 9.0% | 13.1% |
| Median Negative | -8.1% | -10.4% | -9.0% |
| Max Positive | 40.8% | 20.3% | 44.6% |
| Max Negative | -16.7% | -24.1% | -26.1% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 01/31/2026 | 02/27/2026 | 10-K |
| 10/31/2025 | 11/25/2025 | 10-Q |
| 07/31/2025 | 08/22/2025 | 10-Q |
| 04/30/2025 | 05/23/2025 | 10-Q |
| 01/31/2025 | 02/28/2025 | 10-K |
| 10/31/2024 | 11/26/2024 | 10-Q |
| 07/31/2024 | 08/23/2024 | 10-Q |
| 04/30/2024 | 05/22/2024 | 10-Q |
| 01/31/2024 | 03/04/2024 | 10-K |
| 10/31/2023 | 11/21/2023 | 10-Q |
| 07/31/2023 | 08/23/2023 | 10-Q |
| 04/30/2023 | 05/25/2023 | 10-Q |
| 01/31/2023 | 03/03/2023 | 10-K |
| 10/31/2022 | 11/23/2022 | 10-Q |
| 07/31/2022 | 08/24/2022 | 10-Q |
| 04/30/2022 | 05/25/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q4 2026 Earnings Reported 2/25/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2027 Revenue | 1.22 Bil | 1.22 Bil | 1.23 Bil | ||||
| Q1 2027 Non-GAAP Income from Operations | 487.00 Mil | 489.50 Mil | 492.00 Mil | ||||
| Q1 2027 Non-GAAP Diluted EPS | 1.4 | 1.41 | 1.42 | ||||
| 2027 Revenue | 5.07 Bil | 5.07 Bil | 5.08 Bil | 4.4% | Higher New | Guidance: 4.85 Bil for 2026 | |
| 2027 Non-GAAP Income from Operations | 2.05 Bil | 2.06 Bil | 2.06 Bil | ||||
| 2027 Non-GAAP Diluted EPS | 5.77 | 5.79 | 5.81 | -2.9% | Lower New | Guidance: 5.96 for 2026 | |
| 2027 Free Cash Flow | 1.70 Bil | 1.72 Bil | 1.74 Bil | -8.0% | Lower New | Guidance: 1.87 Bil for 2026 | |
Prior: Q3 2026 Earnings Reported 11/24/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q4 2026 Revenue | 1.23 Bil | 1.23 Bil | 1.24 Bil | 1.6% | Higher New | Guidance: 1.21 Bil for Q3 2026 | |
| Q4 2026 Non-GAAP Diluted EPS | 1.48 | 1.49 | 1.49 | 3.8% | Higher New | Guidance: 1.43 for Q3 2026 | |
| 2026 Revenue | 4.85 Bil | 4.85 Bil | 4.86 Bil | 0.5% | Raised | Guidance: 4.83 Bil for 2026 | |
| 2026 Non-GAAP Diluted EPS | 5.95 | 5.96 | 5.97 | 2.3% | Raised | Guidance: 5.83 for 2026 | |
| 2026 Free Cash Flow | 1.86 Bil | 1.87 Bil | 1.88 Bil | 6.2% | Raised | Guidance: 1.76 Bil for 2026 | |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Subotovsky, Santiago | Direct | Sell | 5052026 | 106.58 | 5,274 | 562,097 | 15,228,200 | Form | |
| 2 | Subotovsky, Santiago | Direct | Sell | 5052026 | 102.85 | 2,643 | 271,844 | 15,238,494 | Form | |
| 3 | Subotovsky, Santiago | Direct | Sell | 4202026 | 87.32 | 2,643 | 230,776 | 13,167,156 | Form | |
| 4 | Subotovsky, Santiago | see footnote | Sell | 4202026 | 87.32 | 2,388 | Form | |||
| 5 | Sankarlingam, Velchamy | Pres. of Engineering & Product | Direct | Sell | 4172026 | 85.44 | 7,645 | 653,191 | 12,130,035 | Form |
ZM Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The Probability-Adjusted Skew is significantly greater than 2.0x. The market is pricing in the well-understood bear case (Microsoft competition) while seemingly underweighting the strong leading indicators (accelerating >$100k customer growth) that support the bull thesis (successful platform pivot). This creates an attractive asymmetric risk/reward profile, further enhanced by the current cheap valuation and secular tailwinds in its new growth markets.
STOCK ARCHETYPE
Turnaround / Deep ValueThe company exhibits characteristics of a mature business (high cash flow, slowing core growth), but the investment thesis is entirely dependent on a strategic pivot from a single, maturing product to a multi-product platform. This places the focus squarely on 'Strategic Execution' to offset a structural competitive threat, fitting the Turnaround archetype.
INVESTMENT THESIS
The investment thesis hinges on management's ability to leverage its large installed base to transition from a single-product company facing saturation into a multi-product communications platform. Success is defined by driving significant adoption of high-growth services like Zoom Phone and Contact Center, thereby offsetting the commoditization of the core Meetings product and increasing average revenue per customer.
- The Unified Communications (UCaaS) market is forecasted to grow at a CAGR of up to 25.67%.
- The Contact Center (CCaaS) market is growing at a ~19-20% CAGR.
- The number of customers contributing >$100k in TTM revenue is accelerating, growing 9.2% YoY in the latest quarter.
- Zoom Phone has surpassed 10 million paid seats, demonstrating early traction in a key expansion market.
PRIMARY RISK
The primary friction is the structural and insurmountable distribution advantage held by Microsoft Teams, which is bundled at a low or zero incremental cost within the ubiquitous Microsoft 365 suite. This dynamic commoditizes Zoom's core video product, limits pricing power, and creates a powerful incentive for cost-conscious CIOs to consolidate vendors.
- Microsoft is rated as 'Dominant' in the 'Consolidation-Focused CIO' and 'Price-Conscious SMB' customer segments.
- Zoom's Enterprise Net Dollar Expansion Rate is 98%, indicating that churn and downgrades are currently outpacing expansion revenue from the existing customer base.
- The competitive analysis grades Zoom's 'Distribution Access' and 'Unit Cost Advantage' as 'Worse vs Microsoft'.
| KPI | Threshold | Rationale |
|---|---|---|
| Enterprise Net Dollar Expansion Rate | Sequential improvement and return to >100% | This is the single most important metric to validate the platform cross-sell thesis. A value below 100% signals net churn in the core customer base, which the new products must overcome. |
| Enterprise Revenue Growth Rate | Re-acceleration from the current 6.1% YoY | As the company's primary growth engine, a reversal of the recent deceleration is required to prove that the expansion products' growth is beginning to meaningfully impact the company's overall trajectory. |
| Zoom Phone & Contact Center Adoption | Continued high-growth in announced seat counts or revenue | These new product lines represent the 'Alpha Driver'. Their continued high-velocity adoption is critical to shifting the narrative from a maturing single-product story to a durable platform growth story. |
Platform Pivot vs. Core Commoditization
BULL VIEW
New products like Zoom Phone (>10M seats) and Contact Center are showing strong early adoption, shifting the narrative from a single app to a sticky, unified communications platform.
CORE TENSION
Can Zoom's high-growth expansion products (Phone, Contact Center) achieve scale fast enough to offset the maturation and intense pricing pressure on its core Meetings business from Microsoft Teams?
PREVAILING SENTIMENT
The clearest signal is the Enterprise Net Dollar Expansion Rate of 98%. This metric, below the 100% breakeven level, proves churn and downgrades are outpacing expansion revenue from existing customers.
BEAR VIEW
Microsoft's bundling of 'good enough' Teams Meetings and Phone at zero marginal cost structurally commoditizes Zoom's core offerings, capping growth and pricing power for the foreseeable future.
| Timeline | Event & Metric To Watch |
|---|---|
Feb 25, 2026 | Q4 FY26 Earnings & FY27 Guidance Watch: FY27 Enterprise revenue growth guidance. A number below 5% would be a major negative signal. |
Late April 2026 | Microsoft Q3 FY26 Earnings Call Watch: Commentary on Microsoft Teams Phone adoption and wins against standalone UCaaS vendors. |
Ongoing (Next 3-6 Months) | Major Enterprise Customer Layoff Announcements Watch: Large-scale layoff announcements from major tech and finance companies (key customer segments). |
| Date | Event | Stock Impact |
|---|---|---|
2025-08-21 | Q2 FY26 Earnings Release Details: Announced Q2 revenue of $1.22B, up 4.7% YoY, and raised full-year guidance. The strong beat and raise, along with 7% enterprise growth, caused the stock to surge. | Surged +12.7% $73.17 -> $82.47 |
2025-09-17 | Zoomtopia 2025 Annual Conference Details: Zoom's annual conference featured product announcements and a new $10M commitment from Zoom Cares for AI education. The event generated a modest positive stock reaction. | Modest 1.3% gain $85.20 -> $86.30 |
2025-10-09 | Zoom Phone Surpasses 10 Million Seats Details: The company announced a major milestone for its cloud phone system, reaching 10 million paid seats. Despite the positive operational news, the stock pulled back amid broader market weakness. | Fell notably by -2.9% $82.70 -> $80.28 |
2025-11-24 | Q3 FY26 Earnings Release Details: Reported Q3 revenue of $1.23B and EPS of $1.52, beating estimates. Enterprise revenue grew 6.1%. Despite the beat, the stock was flat as guidance was largely in-line with expectations. | Flat (-0.04%) $78.63 -> $78.60 |
2025-12-15 | AI Companion 3.0 Launch Details: Zoom unveiled the next generation of its AI assistant, AI Companion 3.0, featuring more advanced agentic workflows. The market reaction was negative, possibly due to broader market trends. | Fell notably by -3.3% $89.52 -> $86.54 |
2026-01-12 | AI Companion 3.0 Educational Initiative Details: Zoom announced a push to reinforce AI as a foundational skill for the future workforce, likely tied to its new AI Companion 3.0 features. Stock reaction was positive but muted. | Modest 1.8% gain $85.18 -> $86.75 |
Position Sizing
1% - 3%
CONSERVATIVE
The stock is in an Explosive and Spiking volatility regime. This, combined with Bearish sentiment, a Vulnerable moat, and Low near-term visibility, creates a high-risk profile. Exposure must be capped at a Conservative (1-3%) level until the structural headwinds from competition improve.
Diversification Alternatives
TWLO
SECTORTwilio is more of a communications infrastructure player (CPaaS), making it less directly exposed to the application-layer bundling war between Zoom and Microsoft. Its growth, while slowing, remains higher.
EGHT
INDUSTRY8x8 is a pure-play UCaaS/CCaaS provider that recently reported strong earnings, beating estimates on revenue and EPS. It is showing accelerating business momentum, particularly in AI-driven usage-based services.
Zoom is transitioning from a post-pandemic, single-product video tool with slowing growth to a diversified, AI-powered enterprise communications platform, with future value contingent on the growth of its Phone and Contact Center products to offset maturation in its core Meetings business.
Filter all news through the lens of enterprise platform adoption and AI monetization, asking 'Does this accelerate the shift away from reliance on the online/SMB Meetings segment?'
Enterprise revenue growth accelerating above 7% YoY; customers with >$100k ARR growing faster than 9% YoY; specific, large customer wins for Zoom Phone or Contact Center displacing competitors like Cisco or RingCentral; any sign of Net Dollar Expansion Rate re-accelerating above 100%; successful monetization of 'Custom AI Companion' add-ons.
Enterprise revenue growth decelerating; Net Dollar Expansion Rate falling further below 98%; Online segment churn increasing above 2.9%; announcements of large enterprises selecting Microsoft Teams Calling over Zoom Phone; significant price cuts in core Meetings product to compete with Microsoft bundles.
Quarterly fluctuations in the Online (SMB/consumer) segment revenue; stock price volatility related to general 'work from home' trends; partnerships with hardware vendors like Logitech or Poly \u2014 these are expected and not thesis-changing.
Repricing Catalyst
The primary catalyst is the successful bundling and upselling of the broader AI-powered platform (Zoom Workplace, Phone, Contact Center, AI Companion) into the enterprise customer base. Success is defined by displacing legacy providers like Cisco in large accounts (e.g., a recent Fortune 10 win for 140,000 Zoom Phone seats) and driving growth in AI-centric products like the Customer Experience (CX) suite, which is seeing high-double-digit growth and was included in the top 10 CX deals in Q4 FY2026.
Enterprise Subscriptions
$3.0B TTM (61% of Total) · 79% MarginWhat It Is
Zoom Workplace (Meetings, Team Chat), Zoom Phone, Zoom Rooms, Zoom Contact Center, AI Companion, Webinars & Events.
Who Pays & How
Enterprises (4,468 of which pay >$100k/year) pay for a unified, reliable communication platform to connect a hybrid workforce. Switching costs are elevated by deep integrations with other business software (e.g., Salesforce) and the operational disruption of retraining thousands of employees on a new system like Microsoft Teams.
Competition
Online (SMB & Consumer) Subscriptions
$1.9B TTM (39% of Total) · 79% MarginWhat It Is
Primarily Zoom Workplace (Meetings, Chat) plans sold via self-service online portal.
Who Pays & How
Small-to-medium businesses (SMBs) and individuals pay for reliable video conferencing. The freemium model serves as a large funnel, converting users who need to host longer meetings or have more participants.
Competition
External Quote Links
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