Zoom Video Communications (ZM) develop a people-centric cloud service that transforms real-time collaboration experience.
| Key Statistics | |||||||
| 52-Week Range | Avg. Daily Vol (3 Mo) | Market Value | Dividend Yield | Float % | Target Price | Consensus Rating (5 strong buy – 1 strong sell) |
Next Earnings Announcement |
| 62.02 – 588.84 | 10,998,311 | 110,250.10 | – | 94.8% | 469.50 | 3.58 | 30/11/2020 |
The company offers unified meeting experience, a cloud services that provides a 3-in-1 meeting platform with HD video conferencing, mobility, and web meetings servicing customers worldwide.
Revenue is generated through a subscription model across four channels, Zoom meetings, Zoom phone, Zoom webinar and Zoom rooms. Zoom meetings (mobile and desktop) charges across plans depending on the size of required attendees, from the free basic version up to 100 users subject to a 40-minute time limit to large enterprises hosting up to 500 participants. Zoom phone provides a cloud-based phone system over WIFI and cellular connections with three levels of subscription, including pay as you go in the UK & Ireland, unlimited UK & Ireland and Pro Global to +40 countries. Zoom webinar hosts virtual events to view-only attendees reducing the risks of meeting disruptions and a safer choice for large audiences who may be less familiar with meeting controls. Zoom rooms is a dedicated meeting environment for shared workspaces such as conference rooms, ideal for group collaboration.
Zoom has been a major beneficiary of the work and study from home shift due to the COVID-19 pandemic with daily meeting participants surging from 10m in December 2019 to over 300m by April 2020. The company is positioned to continue to benefit from the shift in working and learning from home, outlasting the COVID-19 pandemic with organizations expected to allow remote working going forward and client churn expected to be manageable as elevated demand allowed the company to rapidly capture market share. As of August 2020, Zoom accounted for 48.6% of monthly active mobile users according to Bloomberg data, compared with 30% for Google meet, 8.5% for Microsoft teams, 10% for Cisco Webex and 2.8% for Skype Business.
While growing globally, 81% of sales are attributable to the Americas, with Europe, Middle East and Africa account for 11% and Asia 8%, levels relatively unchanged from 2019. For the year-ended January 2021 revenue is forecast to rise 285.8% to $2,402.4m compared to $622.7 a year earlier and rise at a slow pace in 2022 to $3,129.7m. Earnings per share is forecast to surge to $2.46 in 2021 from $0.09 in 2020, a 2,631% gain, before a slight increase of 5.4% in 2022 to $2.59. That would see the stock trade on forward P/E mutliples of 157.7 and 149.7 respectively, a steep premium to peers which trade on average forward P/E’s of 24.2 and 18.3.
The average target price of analysts covering the stock is $469.50 with 42% of analysts rating the stock as a buy, compared to 13% as a sell and 45% as a hold.
