Zoom Video Communications, Inc. (ZM) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Splunk, Inc.

Zoom Video Communications, Inc.

HubSpot, Inc.

Veeva Systems, Inc.

ANSYS, Inc.

MongoDB, Inc.

Take-Two Interactive Software, Inc.

Atlassian Corp.

Datadog, Inc.

Fidelity National Information Services, Inc.

Fair Isaac Corp.

Why is Zoom Video Communications, Inc. ?

Low Debt Company with Strong Long Term Fundamental Strength

Healthy long term growth as Net Sales has grown by an annual rate of 28.70% and Operating profit at 34.54%
Company has a low Debt to Equity ratio (avg) at times
The company has been able to generate a Return on Capital Employed (avg) of 150.56% signifying high profitability per unit of total capital (equity and debt)

The company has declared Positive results for the last 7 consecutive quarters

OPERATING CASH FLOW(Y) Highest at USD 1,912.99 MM
ROCE(HY) Highest at 13.6%
RAW MATERIAL COST(Y) Fallen by -2.79% (YoY)

With ROE of 11.78%, it has a attractive valuation with a 2.73 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of -3.02%, its profits have risen by 17.5% ; the PEG ratio of the company is 1.4

High Institutional Holdings at 81.99%

These investors have better capability and resources to analyse fundamentals of companies than most retail investors.

Real-Time Research Report

Verdict Report

How much should you buy?

Overall Portfolio exposure to Zoom Video Communications, Inc. should be less than 10%
Overall Portfolio exposure to Software Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Software Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Zoom Video Communications, Inc. for you?

Medium Risk, High Return

Absolute

Risk Adjusted

Volatility

Zoom Video Communications, Inc.

4.78%

1.13

32.89%

S&P 500

13.22%

0.61

20.17%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

28.70%

EBIT Growth (5y)

34.54%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.87

Sales to Capital Employed (avg)

0.57

Tax Ratio

21.72%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

81.55%

ROCE (avg)

150.56%

ROE (avg)

12.92%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.73

EV to EBIT

19.40

EV to EBITDA

15.67

EV to Capital Employed

14.79

EV to Sales

3.52

PEG Ratio

1.37

Dividend Yield

ROCE (Latest)

76.26%

ROE (Latest)

11.78%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

Mildly Bullish

RSI

No Signal

Bollinger Bands

Bullish

Mildly Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Dow Theory

Mildly Bullish

No Trend

OBV

Mildly Bearish

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

14What is working for the Company

OPERATING CASH FLOW(Y)

Highest at USD 1,912.99 MM

ROCE(HY)

Highest at 13.6%

RAW MATERIAL COST(Y)

Fallen by -2.79% (YoY

CASH AND EQV(HY)

Highest at USD 15,599.62 MM

DEBTORS TURNOVER RATIO(HY)

Highest at 9.1 times

NET SALES(Q)

Highest at USD 1,217.23 MM

OPERATING PROFIT(Q)

Highest at USD 353.9 MM

OPERATING PROFIT MARGIN(Q)

Highest at 29.07 %

PRE-TAX PROFIT(Q)

At USD 448.16 MM has Grown at 53.01%

NET PROFIT(Q)

At USD 358.59 MM has Grown at 63.73%

EPS(Q)

Highest at USD 1.16

0What is not working for the Company

NO KEY NEGATIVE TRIGGERS

Here's what is working for Zoom Video Communications, Inc.

Operating Cash Flow

Highest at USD 1,912.99 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (USD MM)

Net Sales

Highest at USD 1,217.23 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (USD MM)

Operating Profit

Highest at USD 353.9 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (USD MM)

Operating Profit Margin

Highest at 29.07 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Pre-Tax Profit

At USD 448.16 MM has Grown at 53.01%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (USD MM)

Net Profit

At USD 358.59 MM has Grown at 63.73%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is positive

Net Profit (USD MM)

EPS

Highest at USD 1.16

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (USD)

Cash and Eqv

Highest at USD 15,599.62 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debtors Turnover Ratio

Highest at 9.1 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Raw Material Cost

Fallen by -2.79% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales