ZM Valuation

Zoom Communications Inc

Add to Watchlist

Advanced Chart

81.420

+0.59(0.730%)1D

Overview
Forecast
Valuation
Earnings

ZM Relative Valuation

ZM's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, ZM is overvalued; if below, it's undervalued.

Historical Valuation

Zoom Communications Inc (ZM) is now in the Fair zone, suggesting that its current forward PS ratio of 4.97 is considered Fairly compared with the five-year average of 38.43. The fair price of Zoom Communications Inc (ZM) is between 31.68 to 321.69 according to relative valuation methord.

Relative Value

Fair Zone

31.68-321.69

Current Price：81.42

Fair

14.02

Trailing

Forward

8.15

EV/EBITDA

Zoom Communications Inc. (ZM) has a current EV/EBITDA of 8.15. The 5-year average EV/EBITDA is 28.03. The thresholds are as follows: Strongly Undervalued below -42.60, Undervalued between -42.60 and -7.28, Fairly Valued between 63.34 and -7.28, Overvalued between 63.34 and 98.66, and Strongly Overvalued above 98.66. The current Forward EV/EBITDA of 8.15 falls within the Historic Trend Line -Fairly Valued range.

8.67

EV/EBIT

Zoom Communications Inc. (ZM) has a current EV/EBIT of 8.67. The 5-year average EV/EBIT is 30.03. The thresholds are as follows: Strongly Undervalued below -45.52, Undervalued between -45.52 and -7.74, Fairly Valued between 67.81 and -7.74, Overvalued between 67.81 and 105.59, and Strongly Overvalued above 105.59. The current Forward EV/EBIT of 8.67 falls within the Historic Trend Line -Fairly Valued range.

4.97

Zoom Communications Inc. (ZM) has a current PS of 4.97. The 5-year average PS is 11.09. The thresholds are as follows: Strongly Undervalued below -10.95, Undervalued between -10.95 and 0.07, Fairly Valued between 22.11 and 0.07, Overvalued between 22.11 and 33.13, and Strongly Overvalued above 33.13. The current Forward PS of 4.97 falls within the Historic Trend Line -Fairly Valued range.

12.57

P/OCF

Zoom Communications Inc. (ZM) has a current P/OCF of 12.57. The 5-year average P/OCF is 30.00. The thresholds are as follows: Strongly Undervalued below -28.33, Undervalued between -28.33 and 0.84, Fairly Valued between 59.17 and 0.84, Overvalued between 59.17 and 88.34, and Strongly Overvalued above 88.34. The current Forward P/OCF of 12.57 falls within the Historic Trend Line -Fairly Valued range.

13.56

P/FCF

Zoom Communications Inc. (ZM) has a current P/FCF of 13.56. The 5-year average P/FCF is 33.86. The thresholds are as follows: Strongly Undervalued below -32.64, Undervalued between -32.64 and 0.61, Fairly Valued between 67.11 and 0.61, Overvalued between 67.11 and 100.35, and Strongly Overvalued above 100.35. The current Forward P/FCF of 13.56 falls within the Historic Trend Line -Fairly Valued range.

Zoom Communications Inc (ZM) has a current Price-to-Book (P/B) ratio of 2.73. Compared to its 3-year average P/B ratio of 2.81 , the current P/B ratio is approximately -2.95% higher. Relative to its 5-year average P/B ratio of 14.08, the current P/B ratio is about -80.61% higher. Zoom Communications Inc (ZM) has a Forward Free Cash Flow (FCF) yield of approximately 7.57%. Compared to its 3-year average FCF yield of 6.81%, the current FCF yield is approximately 11.16% lower. Relative to its 5-year average FCF yield of 5.05% , the current FCF yield is about 50.06% lower.

2.73

P/B

Median3y

2.81

Median5y

14.08

7.57

FCF Yield

Median3y

6.81

Median5y

5.05

Competitors Valuation Multiple

The average P/S ratio for ZM's competitors is 8.19, providing a benchmark for relative valuation. Zoom Communications Inc Corp (ZM) exhibits a P/S ratio of 4.97, which is -39.38% above the industry average. Given its robust revenue growth of 4.71%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

ZM.O

Zoom Communications Inc

Cyberark Software Ltd

15.84

45.98%

22.85B

Performance Decomposition

Market capitalization of ZM increased by 16.75% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 18.84 to 29.46.

The secondary factor is the Revenue Growth, contributed 4.71%to the performance.

Overall, the performance of ZM in the past 1 year is driven by Margin Expansion. Which is more sustainable.

4.71%

1.16B → 1.22B

Revenue Growth

56.37%

18.84 → 29.46

Margin Expansion

-44.33%

38.53 → 21.45

P/E Change

16.75%