![]() ![]() On the flip side, I am positive on Zoom's medium to long term growth drivers like international expansion and Zoom Phone. Also valuations seem rich on an absolute basis, and the company's revenue growth this year could possibly be below expectations. ZM's top line and bottom line growth is expected to slow considerably this year, with the churn rate of its customer cohort with under 10 staff being a key downside risk factor. ZM's current valuations are not demanding on a relative basis as compared to peers, but the valuation de-rating of the technology sector might have just begun as investors switch to reopening plays in view of the ongoing vaccine roll-out program. Zoom currently trades at consensus forward FY 2022 (YE January 31) Enterprise Value-to-Revenue and EV/EBITDA multiples of 24.3 times and 77.5 times, respectively. The slowdown in ZM's QoQ revenue growth in the most recent quarter could explain why the company's share price performance has been lackluster this year. Zoom's share price was up close to +400% in 2020, but its stock price has declined by -2% year-to-date in 2021. I assign a Neutral rating to Zoom Video Communications, Inc ( NASDAQ: ZM). ![]() Photo by Luis Alvarez/DigitalVision via Getty Images Elevator Pitch
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