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Learn More. When the pandemic hit in , it seemed like everyone around the world started using the product for online communications with friends and co-workers. But now, with the pandemic heading into the rearview mirror and many people returning to in-person meetings, investors are nervous about Zoom stock.

But if we look deeper into how Zoom’s business has performed over the past year, it is a lot healthier than the stock price might indicate. Does that make Zoom stock a buy right now? Zoom’s growth last year came from an expanding customer base and more spending from each customer. A net dollar expansion rate measures revenue growth from existing customer cohorts. Unlike a lot of software stocks, Zoom Video is highly profitable.

Since Zoom offers long-term subscription contracts to customers, it is forced to defer revenue from the income statement to the cash flow statement, which is why FCF is typically higher than operating income. Over time, FCF will be the best metric for valuing this stock. So what’s the catch? The problem is investors are skittish about future growth and churn coming out of the pandemic. This would be a major slowdown from last year to low-teens revenue growth.

While not a terrible situation, some investors might be thinking this is the best it will get and that the Zoom platform reached saturation during the pandemic. This might be true for individuals joining Zoom meetings. But management has a couple of growth drivers up its sleeve: enterprise growth, Zoom Phone, Zoom Contact Center, and international growth. We already discussed enterprises, which management is focusing on as it brings in larger and more durable revenue streams for the business.

Investors should expect enterprise customers to steadily grow for Zoom over the next few years. Zoom Phone and Zoom Contact Center are two new products that management hopes to cross-sell to existing clients to drive its net dollar expansion rate. Zoom Phone is a cloud-based business phone product that aims to replace the clunky legacy systems a lot of companies have.

Contact Center is a very new product that is being offered to Zoom clients who want a cloud-based call center connected to their video communications platform. Zoom also has many other ancillary products, like Zoom Chat, that will hopefully drive down churn and increase spending from its current customers.

Lastly, management thinks it can grow faster outside of the Americas, where Zoom is not as penetrated as in the U. Management said on the conference call they expect this trend to continue in the coming years. After looking at the financials and reading the company’s product roadmap, I think Zoom Video stock could be a great long-term purchase at these prices.

There are risks with investing in any stock. But if Zoom’s FCF continues to grow over the next three to five years, I think investors will be happy looking back at today’s prices.

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Current Price. The huge pandemic winner has seen its stock tumble over the past year. Image source: Getty Images. Zoom Video Communications. Motley Fool Returns Market-beating stocks from our award-winning service. Stock Advisor Returns. Join Stock Advisor. Our Most Popular Articles.

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Is zoom stock a buy.Is Zoom Video Stock a Buy Now?

 
Nerdy tip: Zoom’s stock symbol is ZM. The company’s IPO was in April at $36 a share. In the fiscal year, those profits jumped more than threefold, from $ million to $ . Jun 01,  · Since then, Zoom’s stock is down 67% and is now trading around where it was at the beginning of the pandemic. let’s take a look to see if Zoom stock is a buy now. Image . May 28,  · Zoom stock broke out on Feb. 18 that year from a cup-with-handle buy point of as the coronavirus pandemic began to spread globally.

 

Is zoom stock a buy. Zoom Video Communications Inc.

 

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Everyday investors can now jump on the line with Zoom Video Communications, which debuted on the Nasdaq stock exchange in April under the ticker symbol ZM. Zoom’s cloud-based service allows people in different locations with different devices to connect face-to-face and share content via video, voice and chat.

And in the time of coronavirus, people have increasingly turned to the service as the work-from-home era continues. So Zoom is popular. But does its stock belong in your portfolio?

Read on to find out how to evaluate whether to buy Zoom stock. Zoom makes money by selling its platform subscriptions to everyone from single users to companies with hundreds of thousands of employees.

Unlike some other firms, Zoom went into its IPO as a profitable company. Full disclosure: NerdWallet uses Zoom. But profitability is just one factor investors should consider before buying a stock. Spend some face time with Zoom’s most recent annual report as well as its S-1 filing, both available on its investor relations website.

In other words, all the things that can help investors determine if Zoom is a worthy addition to their portfolio. Research and data are also available via online brokers or independent analysis sites like Morningstar. One reminder: Zoom trades on the Nasdaq under the ticker symbol ZM. Learn how to research stocks.

If you’re still keen after doing some research, consider how Zoom stock would slot in among the rest of your portfolio. Specifically, look at how diversified your portfolio is and what this new investment would mean for your asset allocation. A general guideline for investors is to spread money across different companies, industries and geographies, thereby reducing risk and exposure to any one stock’s sudden movements. Would buying Zoom put you too deep into the technology sector?

Would it tip your portfolio too far into stocks as a whole? As opposed to maintaining a balance between stocks and safer investments like bonds, something financial experts tend to suggest.

Asking these kinds of questions, and keeping an eye on the big picture, can help you stay aligned with your investing goals. One way to invest in Zoom and diversify at the same time might be to buy an index fund or exchange-traded fund. Index funds and ETFs track a market index and allow you to hold stock in hundreds of different companies within one fund. And there are a number of funds with Zoom among their holdings.

Research and a sense of your overall portfolio can help you decide how much money to invest in Zoom. So, too, might your opinion on how long people will continue to work and dial in from home. But there’s more to consider. Look at your overall financial situation and ask:. Will buying Zoom stock put my portfolio out of balance? Not too much in a single company or asset — that’s what investors often aim for. What do I need in the short term? When the goal is to grow money over time, the stock market has a solid track record.

But it’s not a place to protect your short-term savings. And before investing, you might want to make sure you have cash set aside for an emergency. Financial experts often suggest having three to six months’ worth of living expenses at hand. What’s my plan for continued investing? Making regular investments over time, known as dollar-cost averaging , helps keep you from buying into the market when prices are high.

Remember, you can always buy more shares later. See our guide on how to buy stocks for more details, including a look at various order types you can place. View our list of the best brokers for stock trading. Disclosure: The author held no positions in the aforementioned investments at the original time of publication. Research Zoom and its stock. Nerdy tip: Zoom’s stock symbol is ZM. Assess how Zoom stock fits in your portfolio.

Decide how much to invest in Zoom stock. On a similar note Dive even deeper in Investing. Explore Investing. Get more smart money moves — straight to your inbox. Sign up.

 
 

Should I buy Zoom Video Communications (ZM) – Zacks – Key Points

 
 

Is Zoom Stock a good buy inaccording to Wall Street analysts? What is ZM’s earnings growth forecast for ? What is ZM’s revenue growth forecast for ? What is ZM’s Price Target? Min Forecast. Avg Forecast. Max Forecast. Should I buy or sell ZM stock?

All Analysts Top Analysts. Strong Buy. Is zoom stock a buy Sell. Parker Lane. Matthew Harrigan. Tyler Radke. Matthew Niknam. Rishi Jaluria. Ryan Macwilliams. Karl Keirstead. Keith Weiss. Matt VanVliet. Forecast return on equity Is ZM forecast to generate an efficient return? ZM’s Return on Equity is Forecast return on assets Is ZM forecast to generate an efficient return on assets? ZM is forecast to generate ZM earnings per share forecast What is ZM’s earnings is zoom stock a buy share in is zoom stock a buy next 3 years based on estimates from 6 analysts?

Avg 1 year Forecast. Avg 2 year Forecast. Avg 3 year Forecast. ZM’s earnings are forecast to ZM revenue forecast What is ZM’s revenue in the next 3 years based on estimates from 6 analysts?

ZM’s revenue is forecast to ZM’s revenues are forecast to ZM vs Telecom Stocks. View Top Telecom Stocks. Out of 22 analysts, 8 The average Zoom stock price prediction forecasts a potential upside of Analysts Can i host zoom signing up – none: Performing Analysts.

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