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Zoom Video Communications
(NASDAQ:ZM)
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Rating:76Outperform
Price Target:
$106.00
▲(20.43% Upside)
Action:Reiterated
Date:06/16/26
The score is driven by strong financial performance (high margins, robust cash flow, minimal leverage) and a supportive earnings update (beat/raise plus continued buybacks). These positives are partially offset by weak technicals (below key moving averages with negative MACD) and the ongoing risk that growth remains modest despite improving AI/CX momentum.
Positive Factors
Profitability & Margins
Zoom’s very high TTM gross (~77%) and net (~42%) margins reflect scalable cloud economics, strong pricing and disciplined costs. These durable margins sustain cash generation, fund R&D/AI investments and buybacks, and provide a cushion if revenue growth remains modest.
Negative Factors
Modest Revenue Growth
Top-line growth is weak, so recent profit gains come largely from efficiency. If revenue reacceleration stalls, margin expansion has limited incremental runway and long-term shareholder returns will require renewed net-new customer growth or stronger upsell.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability & Margins
Zoom’s very high TTM gross (~77%) and net (~42%) margins reflect scalable cloud economics, strong pricing and disciplined costs. These durable margins sustain cash generation, fund R&D/AI investments and buybacks, and provide a cushion if revenue growth remains modest.
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
$26.36B
Dividend YieldN/A
Average Volume (3M)4.03M
Price to Earnings (P/E)12.9
Beta (1Y)0.92
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. Volume3,072,387
30 Day Avg. Volume4,026,158
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/Revenue5.03
Enterprise Value/Gross Profit6.49
Enterprise Value/Ebitda8.90
Forecast
1Y Price Target
$115.06Price Target Upside30.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
EPS Forecast (FY)6.04
Revenue Forecast (FY)$5.09B
Zoom Video Communications Business Overview & Revenue Model
Company Description
Zoom Communications, Inc. provides a robust platform for enhancing communication and fostering collaboration. The company's global reach is organized into three primary operational regions: the Americas, the Asia Pacific, and Europe, the Middle Ea...
How the Company Makes Money
Zoom primarily makes money by selling subscriptions to its communications platform, with revenue largely driven by paid plans purchased by business and organizational customers. Key revenue streams include: (1) Subscription fees for Zoom Workplace...
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 | 2.79B | 2.56B | 1.44B | 936.76M | 331.60M | 1.15B |
| 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
96.67
Negative
89.32
Positive
87.36
Positive
Market Momentum
-2.22
Negative
48.60
Neutral
72.64
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 above the 20-day moving average (MA) of 87.95, below the 50-day MA of 96.67, and above the 200-day MA of 87.36, indicating a neutral trend. The MACD of -2.22 indicates Negative momentum. The RSI at 48.60 is Neutral, neither overbought nor oversold. The STOCH value of 72.64 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $26.36B | 12.90 | 21.79% | ― | 4.98% | 103.70% | |
71 Outperform | $3.43B | 42.91 | -16.71% | ― | 4.90% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $1.70B | 66.30 | 7.70% | ― | 8.12% | -82.54% | |
60 Neutral | $472.66M | -22.99 | -12.77% | ― | 18.84% | 94.41% | |
52 Neutral | $252.69M | -5.62 | -32.73% | ― | 11.07% | 27.51% |
* Technology Sector Average
ZM
Zoom Video Communications
89.76
16.36
22.29%
RNG
RingCentral
41.77
14.93
55.63%
BL
BlackLine
29.13
-24.52
-45.70%
CRNC
Cerence
10.47
1.14
12.22%
LAW
CS Disco
3.86
-0.22
-5.39%
Zoom Video Communications Corporate Events
Executive/Board ChangesShareholder Meetings
Zoom Shareholders Back Board, Auditor and Executive Pay
Positive
Jun 15, 2026
On June 11, 2026, Zoom Video Communications, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders elected the company’s nominees to serve as Class I directors until the 2029 annual meeting or until successors are duly electe...
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.