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Zoom Video Communications Inc ZM

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Zoom Is Just Showing Off at This Point With Another Blowout Quarter; FVE Up to $245

Dan Romanoff, CPA Equity Analyst

Analyst Note

| Dan Romanoff, CPA |

No-moat Zoom continues to blow past investor expectations with significant upside compared to guidance, while delivering a better outlook and higher guidance for the full year. The video-first communications platform company continues to penetrate the market by leveraging its cloud-based solutions’ ease of use and innovative features, such as OnZoom and Zapps, both introduced at Zoomtopia in November of last year. Management also disclosed 1.5 million Zoom Phone subscribers, which represents 50% growth in the last five months. We see a long runway for growth as the company gains traction with Zoom Phone and evolves its main application to a communication platform, and we are impressed by management’s ability to over deliver in terms of both growth and margins. Given exceptional results and strong guidance, we are once again raising our estimates, which drives our fair value estimate to $245 per share from $223. We still view shares as overvalued.

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Company Profile

Business Description

Zoom Video Communications provides a communications platform that connects people through video, voice, chat, and content sharing. The company’s cloud-native platform enables face-to-face video and connects users across various devices and locations in a single meeting. Zoom, which was founded in 2011 and is headquartered in San Jose, California, serves companies of all sizes from all industries around the world.

Contact
55 Almaden Boulevard, 6th Floor
San Jose, CA, 95113
T +1 888 799-9666
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Apr 30, 2021
Fiscal Year End Jan 31, 2022
Stock Type Aggressive Growth
Employees 5,059

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