Is Zoom stock a good investment?
Based on analyst ratings, Zoom Video Communications's 12-month average price target is $77.68. What is ZM's upside potential, based on the analysts' average price target? Zoom Video Communications has 17.77% upside potential, based on the analysts' average price target.
Zoom is improving its financials
In 2023, revenue increased by only 3% yearly to about $4.5 billion. Admittedly, that rate of increase is unlikely to inspire growth investors, particularly because Zoom forecasts a 2% rise in revenue in 2024. However, it reduced its operating expenses over time.
Zoom Video stock price stood at $59.94
According to the latest long-term forecast, Zoom Video price will hit $60 by the middle of 2024 and then $80 by the end of 2025. Zoom Video will rise to $85 within the year of 2026, $95 in 2027, $110 in 2028, $125 in 2031 and $150 in 2035.
Zoom projected profit, excluding some items, of $4.85 to $4.88 a share in the fiscal year ending in January 2025. Analysts, on average, estimated $4.72. In the fiscal fourth quarter, earnings were $1.42 a share, compared with the average estimate of $1.15. “The outlook was generally ahead of our expectations (mixed vs.
NASDAQ: ZM
The company also just authorized a $1.5 billion buyback plan, which is equivalent to about 7% of its outstanding shares and implies the stock is undervalued. However, analysts expect Zoom's adjusted EPS to dip 5% in fiscal 2025 and only rise 1% in fiscal 2026.
It subsequently grew its revenue at a CAGR of 14% over the following 29 years. To match that impressive growth rate, Zoom will need to make a few major acquisitions to remain a leader in the global video conferencing market, which Fortune Business Insights estimates could still grow at a CAGR of 12% from 2023 to 2030.
A rebound in revenue growth for Zoom stock depends on its success in the corporate market. And the outlook for ZM stock is tied to whether the company morphs into a broader business communications platform. Also, Zoom Video stock has retreated 12% in 2024.
| Month | Price projections for Zoom Video Communications Inc. (#ZM) | |
|---|---|---|
| Low, $ | High, $ | |
| May 2024 | 70.00 | 72.00 |
| June 2024 | 72.00 | 74.00 |
| July 2024 | 74.00 | 76.00 |
Stock Price Forecast
The 20 analysts with 12-month price forecasts for Zoom Video stock have an average target of 77.6, with a low estimate of 60 and a high estimate of 95. The average target predicts an increase of 24.12% from the current stock price of 62.52.
Financial Position: Zoom currently has $6 billion in cash reserves and no debt. The company's free cash flow yield is approximately 7.8%, which is considered attractive.
Why is Zoom shutting down?
System Overload. Similar to hardware incompatibility, slow or overloaded system can cause Zoom crashing. Since the app requires a significant portion of your device's memory, opening multiple applications and windows can affect how it runs.
The largest institutional shareholders of Zoom are Vanguard Group, BlackRock, and ARK Investment Management.
A cursory look at Zoom's financial report tells us what's wrong with the stock. The company's revenues rose 88.3% in its fiscal year 2020, which was followed by a 325% rise in the next year. However, the revenue growth slowed down to 54.4% in the next year, and decelerated even further to 7.1% in the fiscal year 2023.
The company's cash and cash equivalents were $25.98 billion as of Jan 28, 2024, up from $18.28 billion on Oct 29, 2023. NVIDIA, rightfully, has a Zacks Rank #1 (Strong Buy) and a Growth Score of B, a combination that offers the best opportunities in the growth investing space.
As of 2024-04-17, the Fair Value of Zoom Video Communications Inc (ZM) is 51.81 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 59.28 USD, the upside of Zoom Video Communications Inc is -12.6%.
Cathie Wood and her team believe Zoom can pull this off by dramatically increasing its average revenue per user by introducing new products and services and artificial intelligence (AI) features.
Analysts have speculated that Zoom Video could make an acquisition to spur growth. The company had $7 billion on its balance sheet as of Jan. 31. "Zoom said that the $1.5 billion buyback does not preclude M&A," said UBS analyst Karl Kierstead in a report.
| Best for | |
|---|---|
| Google Meet | Google Workspace users |
| Microsoft Teams | Adding team chat to video conferencing |
| CoScreen | Screen sharing and collaboration |
| Jitsi | A lightweight option |
The latest closing stock price for Zoom Video Communications as of April 17, 2024 is 59.08. The all-time high Zoom Video Communications stock closing price was 568.34 on October 19, 2020.
ZM Stock Forecast FAQ
Zoom Video Communications has 17.77% upside potential, based on the analysts' average price target. Is ZM a Buy, Sell or Hold? Zoom Video Communications has a conensus rating of Hold which is based on 6 buy ratings, 16 hold ratings and 2 sell ratings.
What is the price target for Zoom in 2025?
| Year | Prediction | Change |
|---|---|---|
| 2025 | $ 91.60 | 52.05% |
| 2026 | $ 139.27 | 131.20% |
| 2027 | $ 211.77 | 251.54% |
| 2028 | $ 321.99 | 434.51% |
Zoom Video Communications has an overall rating of 3.7 out of 5, based on over 1,694 reviews left anonymously by employees. 65% of employees would recommend working at Zoom Video Communications to a friend and 50% have a positive outlook for the business. This rating has decreased by 7% over the last 12 months.
Zoom Telephonics stock (symbol: MINM) underwent a total of 1 stock split. The stock split occured on April 17th, 2023. One MINM share bought prior to April 17th, 2023 would equal to 0.04 MINM shares today.
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Based on analyst ratings, ZoomInfo Technologies's 12-month average price target is $22.16. What is ZI's upside potential, based on the analysts' average price target? ZoomInfo Technologies has 38.24% upside potential, based on the analysts' average price target.
