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Is zoom a good stock. Want to Buy Zoom Stock? Here’s What You Need to Know

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Let’s take a closer look at Zoom’s growth rates, outlook, and valuations to see if it’s still a worthy investment. Zoom was already generating robust growth back in fiscal , which ended in January of that year, before the pandemic hit. When the pandemic forced more people to attend classes and work remotely, its growth accelerated to breakneck levels in fiscal However, those tailwinds waned throughout fiscal as vaccination rates rose and more people physically returned to classrooms and offices:.

Both of those forecasts surpassed analysts’ expectations and indicated the company could still generate impressive double-digit growth on top of its triple-digit growth last year. Those estimates will likely be raised after its latest report, but they still imply the company will face increasingly difficult year-over-year comparisons as the pandemic ends.

Zoom also faces tougher competition in that slowing market. Last quarter, Microsoft said organizations had more than , Teams users, and more than 3, organizations had over 10, Teams users. But Microsoft isn’t killing Zoom yet. However, Zoom is still aware that it needs to expand its ecosystem beyond video calls to stay competitive.

The deal was called off in September, but Zoom is still working closely with Five9 to expand its cloud-communications capabilities. Zoom also recently started testing out post-video ads for its free users. Those ads might enable Zoom to monetize the tens of millions of free, loss-leading users that it gained throughout the pandemic and stabilize its revenue growth, even as it gains fewer new users. However, Zoom’s stock still isn’t cheap at 52 times forward earnings and 15 times next year’s sales.

Those valuations would be reasonable if Zoom’s growth rates were more predictable, but they’re simply too hot for a company in the midst of an ongoing slowdown. Salesforce’s stock trades at 66 times forward earnings and just nine times next year’s sales. I own some shares of Zoom, but I don’t think it’s the right time to double down on this polarizing stock yet. Zoom has an attractive brand and a sticky platform, but it’s unclear if it can continue generating double-digit sales growth as the pandemic ends and Microsoft aggressively expands Teams.

Instead, I’d monitor Zoom’s growth over the next few quarters to see if its year-over-year growth stabilizes before buying any more shares. Cost basis and return based on previous market day close.

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of Discounted offers are only available to new members.

Calculated by Time-Weighted Return since Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Invest better with The Motley Fool. But, typically, an aggressive growth trader will be interested in the higher growth rates.

Cash Flow is net income plus depreciation and other non-cash charges. A strong cash flow is important for covering interest payments, particularly for highly leveraged companies. Cash Flow is a measurement of a company’s health.

It’s typically categorized as a valuation metric and is most often quoted as Cash Flow per Share and as a Price to Cash flow ratio. In this case, it’s the cash flow growth that’s being looked at. A positive change in the cash flow is desired and shows that more ‘cash’ is coming in than ‘cash’ going out. The Historical Cash Flow Growth is the longer-term year annualized growth rate of the cash flow change.

Once again, cash flow is net income plus depreciation and other non-cash charges. Cash flow itself is an important item on the income statement. While the one year change shows the current conditions, the longer look-back period shows how this metric has changed over time and helps put the current reading into proper perspective. Also, by looking at the rate of this item, rather than the actual dollar value, it makes for easier comparisons across the industry and peers.

The Current Ratio is defined as current assets divided by current liabilities. It measures a company’s ability to pay short-term obligations. It’s also commonly referred to as a ‘liquidity ratio’. A ratio of 1 means a company’s assets are equal to its liabilities. Less than 1 means its liabilities exceed its short-term assets cash, inventory, receivables, etc. Above 1 means it assets are greater than its liabilities. A ratio of 2 means its assets are twice that of its liabilities.

A higher number is better than a lower number. A ‘good’ number would usually fall within the range of 1. Like most ratios, this number will vary from industry to industry. This measure is expressed as a percentage. A higher number means the more debt a company has compared to its capital structure. Investors like this metric as it shows how a company finances its operations, i.

But note; this ratio can vary widely from industry to industry. So be sure to compare it to its group when comparing stocks in different industries. Net Margin is defined as net income divided by sales. This shows the percentage of profit a company earns on its sales. A change in margin can reflect either a change in business conditions, or a company’s cost controls, or both. If a company’s expenses are growing faster than their sales, this will reduce their margins.

But note, different industries have different margin rates that are considered good. And margin rates can vary significantly across these different groups. So, when comparing one stock to another in a different industry, it’s best make relative comparisons to that stock’s respective industry values. Return on Equity or ROE is calculated as income divided by average shareholder equity past 12 months, including reinvested earnings.

The income number is listed on a company’s Income Statement. ROE is always expressed as a percentage. Seeing how a company makes use of its equity, and the return generated on it, is an important measure to look at. ROE values, like other values, can vary significantly from one industry to another. As the name suggests, it’s calculated as sales divided by assets. This is also commonly referred to as the Asset Utilization ratio.

A higher number is better than a lower one as it shows how effective a company is at generating revenue from its assets. It takes the consensus sales estimate for the current fiscal year F1 divided by the sales for the last completed fiscal year F0 actual if reported, the consensus if not. While earnings are the driving metric behind stock prices, there wouldn’t be any earnings to calculate if there weren’t any sales to begin with.

Like earnings, a higher growth rate is better than a lower growth rate. Seeing a company’s projected sales growth instantly tells you what the outlook is for their products and services. Of course, different industries will have different growth rates that are considered good.

So be sure to compare a stock to its industry’s growth rate when sizing up stocks from different groups. The Daily Price Change displays the day’s percentage price change using the most recently completed close. This item is updated at 9 pm EST each day. While the hover-quote on Zacks. This is useful for obvious reasons, but can also put the current day’s intraday gains into better context by knowing if the recently completed trading day was up or down.

The 1 Week Price Change displays the percentage price change over the last 5 trading days using the most recently completed close to the close from 5 days before. The 1 week price change reflects the collective buying and selling sentiment over the short-term. A strong weekly advance especially when accompanied by increased volume is a sought after metric for putting potential momentum stocks onto one’s radar.

Others will look for a pullback on the week as a good entry point, assuming the longer-term price changes 4 week, 12 weeks, etc. The Momentum Score takes all of this and more into account. The 4 Week Price Change displays the percentage price change for the most recently completed 4 weeks 20 trading days. This is a medium-term price change metric. The 4 week price change is a good reference point for the individual stock and how it’s performed in relation to its peers. The 12 Week Price Change displays the percentage price change over the most recently completed 12 weeks 60 days.

This is a medium-term price change metric like the 4 week price change. With 12 weeks representing a meaningful part of a year, this time period will show whether a stock has been enjoying strong investor demand, or if it’s in consolidation, or distress. The 52 Week Price Change displays the percentage price change over the most recently completed 52 weeks trading days. This is a longer-term price change metric.

The 52 week price change is a good reference point. Some investors seek out stocks with the best percentage price change over the last 52 weeks, expecting that momentum to continue.

Others look for those that have lagged the market, believing those are the ones ripe for the biggest increases to come. Regardless of the many ways investors use this item, whether looking at a stock’s price change, an index’s return, or a portfolio manager’s performance, this time-frame is a common judging metric in the financial industry. The 20 Day Average Volume is the average daily trading volume over the last 20 trading days.

Volume is a useful item in many ways. For one, part of trading is being able to get in and out of a stock easily. If the volume is too light, in absolute terms or for a relatively large position, it could be difficult to execute a trade. This is also useful to know when comparing a stock’s daily volume which can be found on a ticker’s hover-quote to that of its average volume. A rising stock on above average volume is typically a bullish sign whereas a declining stock on above average volume is typically bearish.

As they say, ‘price follows volume’. The 20 day average establishes this baseline. Earnings estimate revisions are the most important factor influencing stocks prices. It’s an integral part of the Zacks Rank and a critical part in effective stock evaluation. Seeing a stock’s EPS change over 1 week is important.

But, it’s made even more meaningful when looking at the longer-term 4 week percent change. And, of course, the 4 week change helps put the 1 week change into context. The F1 EPS Estimate Quarterly Change calculates the percentage change in the consensus earnings estimate for the current year F1 over the last 12 weeks.

This time period essentially shows you how the consensus estimate has changed from the time of their last earnings report. Ideally, an investor would like to see a positive EPS change percentage in all periods, i. The Q1 EPS Estimate Monthly Change calculates the percentage change in the consensus earnings estimate for the current quarter Q1 over the last 4 weeks. While the F1 consensus estimate and revision is a key driver of stock prices, the Q1 consensus is an important item as well, especially over the short-term, and particularly as a stock approaches its earnings date.

If a stock’s Q1 estimate revision decreases leading up to its earnings release, that’s usually a negative sign, whereas an increase is typically a positive sign. The change is made all the more important the closer proximity it is to the stock’s earnings date since it is generally believed that the most recent estimates are the most accurate since it’s using the most up-to-date information leading up to the report.

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Is zoom a good stock.Is Zoom Video Communications Stock a Buy?

 
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Is zoom a good stock. Zoom: Bigger, Better, Cheaper

 
› news › technology › zoom-stock-buy-zm-stock-sell. Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation.

 
 

Should You Buy Zoom Stock Today? | The Motley Fool

 
 
› news › technology › zoom-stock-buy-zm-stock-sell. Zoom’s financials remain strong, but I think the company needs to improve future growth prospects to justify trading at current valuation.