Zoom Video Communications, Inc. ($ZM) Earnings (Q1 FY23)

 Zoom Video Communications, Inc. ($ZM) Earnings and Opinion:


Zoom Video Communications is a company in the Technology sector and operates in the Software-Application industry. The company provides a unified communication platform all over the world. Zoom Video Communications was founded in 2011 and is currently headquartered in San Jose, California. The company made its debut on the stock market in 2019.

Zoom Video Communications EPS and Revenue (Q1 FY23):

  • EPS of $1.03 beating expectations of $0.87
  • Revenue of $1.07B in line with expectations of $1.07B
Zoom Video Communications Q1 Highlights:
  • Revenue was up 12% Y/Y
  • Approximately 198,900 enterprise customers, up 24% Y/Y
  • 2,916 customers contributing more than $100,000
  • Cash and Marketable Securities of $5.7B
Opinion:
Zoom Video Communications is currently moving higher, following reporting earnings after the closing bell today. The company had a solid beat on the EPS metric and was able to tie Wall Street expectations for the revenue metric. Talk about a stock that has been put through the ringer over the past 9 months or so. Zoom has seen an 85% selloff since reaching its all-time highs last year. I could see this as a seasonal opportunity company, but transitioned well when the pandemic ended. Zoom was one of the stocks that soared during the pandemic and used its business model to take advantage of the tough times. With lockdowns and things arising from the pandemic, companies and schools had to use something to conduct online meetings. This is where Zoom was able to prevail with its business model and has now carried on to become a huge role with companies. Remote work has become a common theme and seems here to stay. With a company like Zoom, you are able to conduct these meetings effectively and can do it from any part of the world. On terms of the stock, it took a huge hit along with many of the other tech stocks. The things I notice about Zoom though, is the fact that they are profitable and seem to be thriving. While growth has definitely slowed down a bit, it is still showing signs of growth in the double digits, which is important. One thing to note about this company is the gross margin they are able to produce. The cost of revenues are so low because it's just an application that Zoom is able to reinvest a lot back into the business to keep it growing. With the current valuations, a P/S ratio of 6.52 and a P/E ratio of 19.44, the stock seems to not be "cheap", but a lot more reasonable priced than it was 9 months ago. Another thing to note would be the fact that the debt levels are really low and Zoom has a lot of Cash on hand. This is important, especially for now with interest rates rising and borrowing becoming a lot more expensive. Personally, I would almost quote this as a buy. Everything seems to be headed back in the right direction for this company. There's definitely some upside in the long-term with Zoom, as long as remote work is here to stay. Although the growth seems to be slowing down a tiny bit, I can still see this business model here to stay. I would get into Zoom as soon as you can.

*Information from Zoom, Yahoo Finance, Google, CMLVIZ

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