– What Is Zoom’s Long-Term Growth Trajectory? | The Motley Fool

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Is zoom a good long term investment.This Company Is a Cash Machine, and It’s a Long-Term, Stable Tech Stock
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<p>Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources , and more. Learn More. Is Zoom ZM In this clip from “3 Minute Stocks Updates” on Motley Fool Live , recorded on May 25 , Motley Fool contributor Brian Withers discusses Zoom’s financials, and explains why it could make for a stable stock over the long-term. Brian Withers: Over the course of the Coronavirus, Zoom went from being really a niche, fast-growing service to a mass-market tool for businesses and individuals around the world.</p>
<p>Since the beginning of the pandemic, revenue up 5x, net income up 10x. Let’s look at a couple of the metrics that I liked from the quarter. It’s helpful to put it in perspective. That says that customers are starting to sign larger and longer contracts. Forty-nine percent cash flow margin, totally unheard of.</p>
<p>Cash increased a billion dollars from last quarter, last Q1 to this Q1. You know what? Still no debt, no debt on the balance sheet. This is a cash machine that will continue to grow long into the future, but at a slower rate.</p>
<p>I like this as a long-term, stable tech stock in my portfolio. Toby Bordelon: Alright, Brian. As you wrap up here, where do you see Zoom going, going forward, if the growth is slowing? Are they going to become a big consumer brand or do they seem to stay a consumer brand, or do they lean more into that enterprise side perhaps?</p>
<p>Withers: Yeah. When you look through their earnings presentation, it’s all about focus on the enterprise business. They’re looking to double down on tools for sales forces, for call centers, and really just enterprise businesses across the board. I see that as a very sticky and stable platform that will drive subscription revenue growth for the long-term. Cost basis and return based on previous market day close. Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of Discounted offers are only available to new members.</p>
<p>Calculated by Time-Weighted Return since Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.</p>
<p>Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Premium Services. Stock Advisor. View Our Services. Our Purpose:. Latest Stock Picks. Today’s Change. Current Price. This tech stock could offer long-term investors stability. Zoom Video Communications.</p>
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Is zoom a good long term investment
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<p>We know the level of enterprise-level customers and the implied growth runway based on RPO, so it leaves little room for the company to outperform current expectations which would be necessary for the stock to break out much higher.</p>
<p>One action that could make the stock more interesting would be the initiation of a regular dividend giving it more of a value appeal. The only way to justify ZM’s valuation is with some conviction that its initiatives with contact center and customer experience will really take off which are still unproven.</p>
<p>The biggest risk here is that the operating momentum loses traction. Signs that customer growth is slowing or an alternative solution is gaining market share would force a reassessment of the long-term outlook and open the door for another leg lower.</p>
<p>Add some conviction to your trading! Take a look at our exclusive stock picks. Join a winning team that gets it right. Click here for a two-week free trial. The most extensive coverage on SA! We combine fundamental analysis with a data-driven approach to find “outside the box” ideas. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha.</p>
<p>I have no business relationship with any company whose stock is mentioned in this article. The deal also enhances other Zoom initiatives and new product features discussed during the earnings conference call : A key part of our strategy is to enable more and more business workflows within our platform, and I am super excited about our recent launches of Zoom Whiteboard and Zoom IQ for Sales.</p>
<p>Seeking Alpha There’s a lot of ground to cover before really making a dent on year-over-year losses, but there is a sense that the sentiment has turned more positive.</p>
<p>This article was written by. BOOX Research. Author of Conviction Dossier. Outside-the-box trade ideas through a powerful multi-sector strategy. Is this happening to you frequently? Please report it on our feedback forum. If you have an ad-blocker enabled you may be blocked from proceeding. From a valuation perspective, ZM stock looks increasingly cheap as well. Despite plunging share price, revenue and profit have continued to grow, pushing the price-earnings and price-sales ratios to all-time lows.</p>
<p>As a result, the stock now trades around 52x forward earnings and 22x trailing sales. Interested buy-and-hold investors could consider buying the dip in ZM shares. On the date of publication, Tezcan Gecgil did not have either directly or indirectly any positions in the securities mentioned in this article. Tezcan Gecgil, Ph. In addition to formal higher education in the field, she has also completed all three levels of the Chartered Market Technician CMT examination.</p>
<p>Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. Stocks to Buy. Market Insight, Financial Articles. Today’s Market. Close Menu. Investors might want to wait for the prices to fall more. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website.</p>
<p>Offers may be subject to change without notice. Article continues below advertisement. Why ZOM stock has fallen from its peaks. Source: Zomedica Twitter. WallStreetBets pumped Zomedica stock. ZOM stock might fall more. ZOM target price.</p>
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Is zoom a good long term investment.Is Zoom Video Stock A Buy After Recent Earnings? Our Call Is To ‘Mute’ This One
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<p>Dow Futures 32, Nasdaq Futures 12, Russell Futures 1, Crude Oil Gold 1, For the full year, they’re expecting basically 4. Now, if this is a company growing at 55 percent per year, that’s a really cheap price to pay for a stock growing that fast.</p>
<p>If this is a stock that’s growing zero percent per year, that’s a lot to pay for a stock like that. Zoom is somewhere in the middle, but I don’t know where it is in the middle of that range. I think that what’s a little bit tough for everybody to decipher as we look at our earnings right now is what is the long-term growth rate for a company like Zoom, especially as everybody gets into video conferencing, whether it’s Microsoft Teams or Google Meet, any of these larger platforms.</p>
<p>Is Zoom going to be able to compete long term. Yes, I know if you guys had a chance to look at the numbers a little bit, but I’ve been curious about your thoughts on what the future of Zoom is, is it the trough in growth going to continue or where are we headed?</p>
<p>Rachel Warren: I can jump in. I really like this company, and I’m an investor. It’s been a bumpy ride in recent months to put it mildly. But I haven’t had a chance to look too deeply.</p>
<p>I think what you mentioned about what is that long term growth going to look like? I think the company can study. I think it has a lot of strong potential, but I do think a lot of the volatility we’ve been seeing with the stock is exactly that.</p>
<p>A lot of investors trying to figure out, OK, what is its long-term growth trajectory and how are we supposed to value it? I mean, that revenue growth is looking really good. Bottom line is good.</p>
<p>It’s doing great in terms of cash and revenue is at 55 percent year-over-year for the full-year Finance Home. Zoom Video Communications, Inc.</p>
<p>Currency in USD. Add to watchlist. Trade prices are not sourced from all markets. And I also don’t think Zoom will lose its leading position again, but I don’t know if I would describe Zoom as a company with a wide economic moat yet. It should be possible for Zoom to create a wide economic moat over time and it is management’s task to make strategic decisions to create and widen an economic moat.</p>
<p>Finally, we also have to look at the valuation to determine if Zoom could be a good investment and we already mentioned the price-to-free-cash-flow ratio above. And as free cash flow constantly increased and the price constantly declined, Zoom seems to be reasonably valued right now. Analysts are expecting earnings per share to be lower in the next fiscal year and it is reasonable to assume free cash flow also to be lower. For such a calculation we also need to estimate what free cash flow could be realistic in the years to come and I honestly have difficulties to come up with realistic growth assumptions.</p>
<p>So, we could look at Zoom from a different perspective and ask how much Zoom needs to grow in the years to come in order to be fairly valued. In my opinion, Zoom could be describe as fairly valued right now. Growth in the high single digits seems like a goal that could be achieved in the years to come with analysts being even more optimistic. I would be quite confident, that Zoom will still play an important role after the pandemic. But I don’t know if Zoom has a wide economic moat and without such a competitive advantage, I have my doubts if we should consider Zoom as great long-term investment.</p>
<p>Without an economic moat, the market and demand for the services might grow, but competitors will steal market shares. All in all, I would consider the stock being a hold right now. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article.</p>
<p>In Hindsight I know it is always easy to explain events in hindsight – and I did not publish an article about Zoom before – but that price-sales ratios of were not sustainable should not be surprising for anyone. Business Description Zoom Video Communications was founded in and launched its software in Zoom is describing itself the following way: Our frictionless communications platform is the only one that started with video as its foundation, and we have set the standard for innovation ever since.</p>
<p>From killing application to killing global communication platform Zoom ecosystem currently relies on: 1. Zoom Rooms Zoom rooms are suited for large corporates and organizations that constantly rely on Zoom video meetings.</p>
<p>Zoom United It’s a bundled offer that includes all or part of the features we have seen above to serve clients’ needs better. Key valuation issues The pandemic has offered Zoom free visibility, which would have otherwise required millions of dollars and a great marketing effort. We assume a 3. See table 4. This article was written by. Moat Investing. We are a group of experienced investors that like to dig deeper into stocks to find growth stories at a reasonable price with strong economic moats.</p>
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