Analyst Note| Dan Romanoff, CPA |
Zoom reported solid results for its fiscal first quarter, featuring in-line revenue, strong profitability, and a slightly better outlook for profitability for the year than was previously provided. After modest model adjustments, we maintain our fair value estimate of $160 per share and see shares as attractive. We are relieved to see overall stabilization after a surge in pandemic-fueled demand followed by the inevitable slowdown, with continued strength in enterprise customers. Management characterized new solutions such as Whiteboarding, contact center, and Zoom rooms as being more than 10% of revenue in aggregate already and believes that within the next two or three years will feature a single new solution generating 10% of total revenue, which we view as a positive indicator for long-term growth.