Zoom Video Stock Review [ZM] | Is Zoom Still Underrated?
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👏👏👏 Big shout out to our growing list of Patreons. For those of you want (and can) support our channel, here is how you can help: https://www.patreon.com/user?u=13016082
You can now book a live 1X1 call with me via Clarity here: https://clarity.fm/tomnashv2
I don't have any position in ZM.
DISCLAIMER: All of Tom's trades, strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching To'ms videos, please Don't take any of this content as guidance for buying or selling any type of investment or security. Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.
Hey this is tom and in today's video we're going to be doing a full due diligence, stock review of zoom video communications. As you know, in my videos i don't do any fluff, i don't sell nothing. So don't click, nothing, don't smash. Nothing! Don't do none of that stuff just pay attention and, let's jump straight into it, don't want to waste any of your time.
So the first thing i want to know is what the hell is going on with zoom. So, as you can see right here from the past year's chart, the stock had a massive spike twice during the whole covet pandemic and since then, as the reopening trend, kind of kicked in this stock has been kicked. The curve falling all the way down to 299 289 literally the lowest we've seen it in a while. But since then it's been doing a nice recovery pattern reaching all the way to 400 and now pushing back to 350..
So is this little pushback an opportunity to get in before the crowd? I'm going to show you why i think the answer is yes, you know, i don't hold you hostage in my videos. I always give you away the bottom line. First, i do think it's an opportunity and i'll show you why, before we go through the financials, let me just share with you my thesis. I think that kovit is making a comeback.
It's kind of the euthena turner of the medical world. I guess it never goes away, not that i'm comparing tina ternary to a pandemic. God forbid, i love tina, but i mean: what's love got to do with it, i'm just kidding. In any case, we basically have here a stock, that's kind of become a sleeper.
So in a weird way, we have this stock that used to be in its glory days. Kind of the flagship of the whole pandemic stocks fell off, and now i think it became a sleeper one of those old cars that you put a five-liter engine in and they beat supercars. I think that me the one now here's the whole story here as those whole resurgence all covered and the variants, and all of this is starting to slowly creep back into our lives. I think people not pricing enough how bad things are about to get.
I think we're about to go back to way worse than people. Imagine now i'm not saying it's going to be full lookup mode again, maybe it is maybe it isn't, but things ain't just reopening back to normal, whatever normal is anytime soon, and i think zoom will be one of the beneficiaries of this kind of reversal trend and If you look at the pranks you'll see that most of these analysts agree with me out of those 21 ratings, i think 19 of them or 18 of them see an upside for the stock by the way, if you want to sign up for the pranks premium, There's a 10 discount code in the description i've been using it way before i had an affiliate link, so you might take my word for this so 421.75 and if you look at the breakdown i broke it down, based on top five star analyst. Only this is by the way, alex our favorite analyst from the palantir calls he's a huge volunteer fan and he has it at 430. 21 upside.
If you scroll all the way from these kind of top line, analysts you'll see that they have every single one of them. Apart from two have upsides, even this one has only three percent downside. This one has a 30 downside, but, as you can see, the mass of them definitely see a huge upside, and i agree, and all you got to do is just click on this profile. Look alex is ranked number two in the country out of 7623 analysts and he has been covering zoom for a while, giving it a 21.04 upside with 430 target price. So this dude definitely knows what he's talking about 81 success rate 37.6. Average return he's. Definitely a smart guy and i'll show you why i agree with him based on my dcf and these financials and, as you can see right here, we have below five percent short interest for the stock at 355 dollars, meaning institutional short sellers are not seeing 355 as An attractive price to short: essentially they don't think that is expensive and i want you to look at their gross profit margin and their ebitda margin. 70 gross profit, 30, ebay margin.
Look at this 26.61 net income margin. This company is printing money and look at the guidance here for the future growth look. They grew 300 this year expected to still grow 100 next year. Even the growth was over 1.7 000, but still expected to grow by 155.
That looks small compared to the previous year's numbers, but trust me, these numbers are impressive, but i think with the pandemic resurgence, these numbers are going to definitely be way higher and i think the market isn't pricing this correctly. The problem is that people are focusing on these multiples and they're definitely way more expensive that anybody wants to touch. However, the problem with these multiples is that they're, based on anticipated earnings for next year that are way lower than they're, actually going to be with the pandemic resurgence, and that creates a distortion. And if you look right here, this is the beginning of the trend.
Right now we had a massive boom. Then we have the decline, and now, with these 22 over the last three months, that's the beginning of the upwards trend. In my opinion, and everything i say here is just my opinion, meaning it might be wrong might be inaccurate. My derivatives of the madman, you have to do your own research yourself, i'm not a financial advisor just a guy on the internet.
So do your own research, but just looking at the earnings look they've beat the last four of their earnings and they're going to keep doing it because the pandemic isn't really going anywhere. Look at their balance sheet: 4.7 billion billion in cash and cash equivalents. Look at this 6 billion in assets over 1.7 liabilities. This company is killing it with so much cash and just look at the income statement right here.
This is going to settle it for good. This company was growing like crazy way before the pandemic. Look 122 million. Then 145 then 166. These are quarterlys. You want to see annuals look at the annual growth for zoom for the past few years. This is not pandemic related 60 to 150 to 330 to 620.. This all happened way before the pandemic, so to say that this company wasn't growing is a gross mistake and to cap it off right.
Here we have our dcf. I rented this cf, basically based on a declining revenue model. Essentially we have 100 well. I did 90 growth next year as anticipated, then 70, then 60, then 50 for the next two years: four percent perpetual growth 18 multiplier, which is a conservative approach.
I think this company should be priced at 25, but let's just use 18 for caution's sake, and this is what we have here: 383 for the perpetual approach 496 for the multiple approach. So we have 440 the target price for me: 355 current price, giving it a nice tasty, 24 upside for this stock, which is definitely, i think, an opportunity. But you do your own research find out for yourself. Just my opinion have a great day shout out to channel members shout out to patreons.
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Afterb $ZM tanked 16% today, this video is a bit ill adviced
You are so stupid 🙂 good call on ZM! Today zoom is donw 16% and BABA is up 4% 😀 😀 😀
And it just hit $305 after earnings.
God bless short sighted people. Diving in just now!
COVID will last until Sept of 2024 at the very least so I think zoom is good
Just keep selling cash secure puts at 290 until it fills
I like your take Tom. Allow me to add 2 things
1. CEO Eric Yuan is very strong and has built a strong team. They eat , sleep and breathe their product –
2. I bought the Zoom Pro version for a year (my small business) because I find I need to have both Zoom and MS Teams. Some of my clients prefer the one and some prefer the other. It’s like having a small shop and accepting Visa and MasterCard. For me, I need both.
Hi Tom zoom bought 💯 shares @$342 ish goes up so so then drops. What do you think it’s gonna be more salad and grow more soon????
Tom. You don’t elaborate on the multiple ZM is trading at. It is still way overvalued. Nobody wants to buy this stock. Respectfully, you are dead wrong on this one.
Hey Tom I think Tdoc and docu might go up also if your thinking Covid is coming bak
Sure Zoom may come back with Delta here, but mmm I think personally there may be better plays out there if one is looking to buy and hold out for a long time to come!
The potential is real but in my opinion, it depends too much on COVID situation. Most of it's growth was during COVID and given restrictions around the world but with vaccine and people's resentment toward restriction, there would have to be a great number of cases to implement such restrictions. Also, there are good alternatives, some even better than zoom. My college and job transfered from zoom to big blue button, microsoft teams, skype etc.. Every one of them was in some way better for specific purpose than zoom.
Hey Tom, thank you for your analysis. I was wondering how you got the 75,000 in NWC for 2021? As I wasn't able to get that number when subtracting current liabilities from current assets. I would really appreciate your clarification. Thanks
Pandemic to return? Even after all these vaccines? And lower deaths? I think not. Zoom might still do well but thinking we are going into more lockdowns is pushing it too much. It’s a pass from me too.
be careful, they have connections with the chinese govt
Imagine other crews (e.g. PLTR) building Zoom's products. They'd be done in month. This is a purely user-, not tech-driven valuation. All the products are way too simple – even respecting the backend. There is no edge in the long run.
Discord and Skype are free and this company is somehow milking revenue like it’s a cow. I really don’t think it’s going to last though, not to mention when people say it did well during the pandemic: it ran up significantly before the pandemic and actually fell during, i dont know if there was a split or dividends there but that’s not good performance at all.
i dont think delta will be as strong as you think, look at norway and brittan
Why is everyone rating $PLTR as a $25/share company?
Interestingly, I've only begun hearing, and of course thereafter reading & analyzing, some reports upon the state of medicine within China. Evidently, technology is finally making its long-awaited foray into that particular market. What gives the bullish analysts even more optimism is how difficult it is for rural & "suburban" Chinese to access high-quality medical doctors and/or care. Premier doctors and facilities exist only in the highest-tier cities, of which there are comparatively few, certainly. Now, Zoom wouldn't be the only beneficiary should this trend continue, but it may cement unto it a higher level of support than ever previously expected, such as at this level currently, for example.
I have been in full lock down for 7 weeks in Australia.
Everyone NEEDS to understand, the hedges know they just need to prolong this until the inevitability 4th wave. The reason streaming isn’t winning, we were forced to stay home. Government closed business! Of course people want to go out to the movies but far too many are bending over and taking these ridiculous restrictions right up the 💩’er!!
We need wake up and say NO to this upcoming 4th wave. What the hedges are underestimating is the resiliency of 🦍 nation.
“COVID” restrictions and vaccine passports are tearing at the fabric of the World, segregation literary divides us.
Wallstreet and the markets are blatantly criminal, our government refuses to act. The criminality is there and no one with the power to change things is acting. We have broken laws & regulations that are being exposed DAILY!!! Where is the government outrage??
Theres racial divide, rich vs poor, vaccinated vs vaccinated. Apes vs Wallstreet. We a are owed money but instead the powers that be continually change the rules and keep their boots on our throats. Its time to say ENOUGH!!
🦍2gether💪🏻
Our government needs to understand that we are bubbling just below the surfaces. Take back your Rights!!! ✊🏻
Love ZM during the pandemic love it again during delta ….People are asleep as usual. Thank you Tom.
Considering Zoom's history of acquisitions lately and their mostly unrecognized product lineups, they seem to have alot of unknown stuff under the hood that we might not see for awhile as well. Add in the many integrations with other software suites and physical products, even if it seems overvalued it might surprise us
Hey Tom you should really do an analysis on Tattooed Chef (TTCF) the remind me a lot about PLTR just in the food sector. Love the content, keep it up man!
Personally I come from an organization that uses zoom, my university and I think zoom is losing their grip on the space. While we are still using zoom, our lectures are also exploring Microsoft teams and personally I prefer it more because it's more comprehensive and they seem to have less of a paywall even for free users. Perhaps zoom might have done enough to be a household name, but when it comes to conferencing products like these, the switching costs won't be too high, because covid is here to stay like u said and everyone should know how to use these types of apps
I wanted to buy Zoom when it “was” at $200. But, I only had enough $$$ to focus on my “High Conviction” stocks (TSLA, PLTR,SQ,NVDA). I think $350 is a little too high for my blood. If it drops to 300-below, I’ll probably buy in and add buy the dip to add.
Hey guys starting a class action lawsuit against Tom, it's been 7 months since his last BNGO video and that's just not gonna cut it, time to get the lawyers involved.
I would defiantly buy Zoom but only after a market crash. They might be benefiting from the pandemic but don't forget the fundamentals. Are the management structure competent or just lucky? Does Zoom have any kind of mote? In todays hugely over priced and hyped market Zoom is a bit of a one trick pony and I think juggernauts like Microsoft and Google could undercut them anytime they wanted to.
I will invest in Facebook at around 350-370 range instead.
Easy money☝️👍
Great video Tom, however, in my opinion, COVID's resurgence doesn't equate to Zoom doing well, they offer a single product which now isn't the leader in the market. There are alternatives out there that are taking share of the market away from Zoom. Think back to Skype… in the early days you literally used to say, "I'll skype you later" rather than using a descriptive word, you'd just name the company/product you were using, in 2020 I heard a lot of "Zoom Calls", "Zoom Meetings", "Let's catch up on Zoom". Now? Nothing. Nobody even mentions it, teams has provided a better service and nobody ever cares enough about the product to say "Team Calls" or whatever. Zoom fell into that Skype trap, they were a fad and got lucky, they arrived on scene first and had a good product, but other companies can make better products in less time, costing less for them to develop.
I do think because of the way the markets are at the moment, Zoom will 100% go up in the coming weeks/months as Covid begins to reemerge. But whether that's justified, I'm unsure. I'll be staying away 🙂
I disagree, I think there’s going to be a big vaccine push, vaccine passports etc, that would avoid any shutdown.
If a strain comes out that is vaccine resistant then I can maybe see lockdowns again, but I think the chances are low.
I like how zoom stock has sort of become a fear indicator for COVID variants 😂
Thanks for this video. Any chance we can get an update on CHEK ?