Zoom Video Communications, Inc. Class A (ZM)
NASDAQ:ZM
Want to see ZM full AI Analyst Report?
Top Page
Zoom Video Communications
(NASDAQ:ZM)
Select Model
Select Model
Rating:81Outperform
Price Target:
$112.00
▲(27.24% Upside)
Action:Reiterated
Date:05/23/26
The score is driven primarily by strong financial performance (high margins, minimal leverage, and robust free cash flow) and a constructive earnings outlook with raised guidance and continued product momentum. This is partially tempered by modest revenue growth/retention headwinds and mixed near-term technical signals.
Positive Factors
Very strong balance sheet and minimal leverage
Extremely low debt and a strengthened equity base give Zoom durable financial flexibility: supports continued product investment, opportunistic M&A or sustained buybacks, and reduces refinancing risk. This conservatively levered structure preserves optionality through economic cycles and competitive investment needs.
Negative Factors
Modest top-line growth and flat recent revenue
Low-single-digit revenue growth indicates demand headwinds: profitability gains have come mainly from efficiency rather than meaningful expansion. Without sustained revenue acceleration, margin improvements and cash returns may not translate into durable scale-led growth, limiting long-term enterprise value creation.
Read all positive and negative factors
Positive Factors
Negative Factors
Very strong balance sheet and minimal leverage
Extremely low debt and a strengthened equity base give Zoom durable financial flexibility: supports continued product investment, opportunistic M&A or sustained buybacks, and reduces refinancing risk. This conservatively levered structure preserves optionality through economic cycles and competitive investment needs.
Read all positive factors
Zoom Video Communications Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Zoom is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Zoom is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyZoom Video Communications (ZM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.85B
Dividend YieldN/A
Average Volume (3M)5.36M
Price to Earnings (P/E)14.4
Beta (1Y)0.91
Revenue Growth4.98%
EPS Growth103.70%
CountryUS
Employees7,412
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)6.94
Shares Outstanding264,645,630
10 Day Avg. Volume6,139,232
30 Day Avg. Volume5,362,825
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)2.82
Price to Sales (P/S)5.68
P/FCF Ratio14.38
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue5.87
Enterprise Value/Gross Profit7.58
Enterprise Value/Ebitda22.45
Forecast
1Y Price Target
$115.88Price Target Upside31.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
EPS Forecast (FY)6.05
Revenue Forecast (FY)$5.09B
Zoom Video Communications Business Overview & Revenue Model
Company Description
Zoom Communications, Inc. engages in the provision of a communications and collaboration platform. It operates through the following geographical segments: Americas, Asia Pacific, and Europe, Middle East, and Africa. The company was founded by Eri...
How the Company Makes Money
Zoom primarily makes money by selling subscriptions to its cloud communications products and platform services. The company’s core revenue stream is recurring subscription revenue from paid plans for Zoom Meetings/Zoom Workplace (licensed per user...
Zoom Video Communications Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Aug 24, 2026
Earnings Call Sentiment Positive
The call conveyed solid financial execution (Q1 revenue beat, raised full-year guidance), strong profitability and cash generation, and pronounced early momentum across AI products, contact center/CX and multiproduct enterprise expansion. Operational positives — notable AI adoption (paid MAUs +184%), product wins displacing legacy vendors, margin expansion and healthy cash flow — materially outweigh the modest near-term headwinds (slight online churn uptick, NDR at 99%, FX effects, and deferred revenue timing variability). Management acknowledged areas to address (AI awareness, competitive pressures) and provided a constructive outlook with incremental buyback authorization.Positive Updates
Revenue Beat and Growth
Q1 total revenue $1.24B, up 5.5% year-over-year (4.6% in constant currency), $14M above the high end of guidance; company raised full-year FY27 revenue guidance to $5.08–5.09B (midpoint +4.4% YoY).
Negative Updates
Online Churn Tick and Modest Online Growth
Online average monthly churn rose to 3.0% in Q1 from 2.8% in Q1 FY26 (a nominal uptick); online revenue growth was modest (Q1 online revenue +2.8%) and management expects deceleration in online growth over Q2–Q4.
Read all updates
Q1-2027 Updates
Positive
Negative
Revenue Beat and Growth
Q1 total revenue $1.24B, up 5.5% year-over-year (4.6% in constant currency), $14M above the high end of guidance; company raised full-year FY27 revenue guidance to $5.08–5.09B (midpoint +4.4% YoY).
Read all positive updates
Company Guidance
Zoom guided Q2 revenue of $1.265B–$1.27B (≈4.1% y/y at the midpoint), non‑GAAP operating income of $508M–$513M (40.3% operating margin at the midpoint) and non‑GAAP EPS of $1.45–$1.47 on roughly 304M shares; for FY‑27 it raised full‑year guidance to revenue of $5.08B–$5.09B (≈4.4% y/y at the midpoint), non‑GAAP operating income of $2.065B–$2.075B (40.7% margin at the midpoint), non‑GAAP EPS of $5.96–$6.00 on ~304M shares and free cash flow of $1.7B–$1.74B. Management expects Q2 deferred revenue growth of 2–3% y/y (Q1 deferred revenue was $1.49B, +5% y/y), RPO of ~ $4.3B (+11% y/y) with noncurrent RPO +19%, and noted Q1 results that beat guidance (Q1 revenue $1.24B, +5.5% y/y, $14M above the high end; non‑GAAP operating income $509M, +9% y/y, $17M above the high end; non‑GAAP EPS $1.55 on ~300M shares, $0.13 above the high end). The company finished Q1 with $7.7B cash, repurchased 4.2M shares for $362M in the quarter (40.4M shares / $3.1B total repurchased) and announced an incremental $1B share‑repurchase authorization; future buybacks are not included in the EPS guidance.Zoom Video Communications Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
92
Very Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.93B | 4.87B | 4.67B | 4.53B | 4.39B | 4.10B |
| Gross Profit | 3.82B | 3.75B | 3.54B | 3.45B | 3.29B | 3.05B |
| EBITDA | 1.29B | 1.26B | 935.93M | 629.73M | 327.75M | 1.11B |
| Net Income | 2.07B | 1.90B | 1.01B | 637.46M | 103.71M | 1.38B |
Balance Sheet | ||||||
| Total Assets | 12.16B | 11.96B | 10.99B | 9.93B | 8.13B | 7.55B |
| Cash, Cash Equivalents and Short-Term Investments | 7.72B | 7.82B | 7.79B | 6.96B | 5.41B | 5.42B |
| Total Debt | 60.21M | 58.48M | 64.43M | 72.95M | 96.48M | 105.72M |
| Total Liabilities | 2.19B | 2.15B | 2.05B | 1.91B | 1.92B | 1.77B |
| Stockholders Equity | 9.97B | 9.81B | 8.94B | 8.02B | 6.21B | 5.78B |
Cash Flow | ||||||
| Free Cash Flow | 1.96B | 1.92B | 1.81B | 1.47B | 1.18B | 1.46B |
| Operating Cash Flow | 2.02B | 1.99B | 1.95B | 1.60B | 1.29B | 1.61B |
| Investing Cash Flow | -634.48M | -278.90M | -1.11B | -1.18B | -318.32M | -2.86B |
| Financing Cash Flow | -1.71B | -1.81B | -1.03B | 60.19M | -936.94M | 34.07M |
Zoom Video Communications Technical Analysis
Positive
88.02
Price Trends
94.35
Positive
89.19
Positive
86.44
Positive
Market Momentum
3.11
Negative
55.61
Neutral
60.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZM, the sentiment is Positive. The current price of 88.02 is below the 20-day moving average (MA) of 103.18, below the 50-day MA of 94.35, and above the 200-day MA of 86.44, indicating a bullish trend. The MACD of 3.11 indicates Negative momentum. The RSI at 55.61 is Neutral, neither overbought nor oversold. The STOCH value of 60.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZM.
Zoom Video Communications Risk Analysis
Zoom Video Communications disclosed 61 risk factors in its most recent earnings report. Zoom Video Communications reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Zoom Video Communications Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $30.85B | 14.45 | 21.79% | ― | 4.98% | 103.70% | |
71 Outperform | $3.69B | 42.45 | -16.71% | ― | 4.90% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $1.68B | 64.07 | 7.70% | ― | 8.12% | -82.54% | |
58 Neutral | $557.17M | -24.35 | -12.77% | ― | 18.84% | 94.41% | |
51 Neutral | $251.41M | -5.64 | -32.73% | ― | 11.07% | 27.51% |
* Technology Sector Average
ZM
Zoom Video Communications
101.62
21.27
26.47%
RNG
RingCentral
42.29
15.18
56.00%
BL
BlackLine
28.66
-28.69
-50.03%
CRNC
Cerence
10.61
0.43
4.22%
LAW
CS Disco
3.77
-0.68
-15.28%
Zoom Video Communications Corporate Events
Executive/Board Changes
Zoom Announces Planned Resignation of Chief Operating Officer
Neutral
Apr 2, 2026
On March 30, 2026, Zoom Video Communications, Inc. announced that Chief Operating Officer Aparna Bawa notified the company of her intention to resign, effective May 8, 2026. The company stated that Bawa’s decision to step down was not due to...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.