ZM - Embedded Expectations Analysis - 2021 04 01
Zoom Video Communications, Inc. (ZM:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 105.3x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about customer growth, virtual event platform opportunities, and the Zoom ecosystemSpecifically, management may lack confidence in their ability to strengthen their customer relationships, sustain customer growth, and manage their G&A costs. They may also be exaggerating the growth opportunities in the virtual event platform market, the potential of OnZoom, and the sustainability of their revenue expansion. Furthermore, management may lack confidence in their ability to find accretive acquisitions, maintain their platform's privacy and security capabilities, and view their business from a customer's perspective. Moreover, they may be overstating the potential of a collaboration with Microsoft, the strength of their online and direct businesses, and the availability of opportunities to expand the Zoom ecosystem. Finally, they may lack confidence in their ability to meet their EPS outlook and
continue to sell into their installed base
Zoom Video Communications provides a video-first communications platform that delivers happiness and fundamentally changes how people interact. The company connects people through frictionless video, voice, chat and content sharing and enable face-to-face video experiences for thousands of people in a single meeting across disparate devices and locations. The company's cloud-native platform delivers reliable, high-quality video that is easy to use, manage and deploy, provides an attractive return on investment, is scalable and easily integrates with physical spaces and applications.
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