Zoom Communications, Inc. (ZM) Stock Analysis — Fair Value, Risk & Moat Rating
NMS · Technology · Software - Application
Is Zoom Communications, Inc. a safe investment right now?
Zoom Communications, Inc.'s Altman Z-Score of 9.64 places it in the safe zone. Our fair value estimate is $76.36 (Overvalued). Moat rating: 2.9/5 stars.
Could Zoom Communications, Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 9.64 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives ZM's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.5567 | 1.2 | 0.67 |
| B · Retained Earnings / Total Assets | RE / TA | 0.4765 | 1.4 | 0.67 |
| C · EBIT / Total Assets | EBIT / TA | 0.0939 | 3.3 | 0.31 |
| D · Market Cap / Total Liabilities | MCap / TL | 12.6467 | 0.6 | 7.59 |
| E · Revenue / Total Assets | Rev / TA | 0.4071 | 1.0 | 0.41 |
How has ZM's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2023 | 10.19 | Safe |
| 2024 | 10.32 | Safe |
| 2025 | 9.85 | Safe |
| 2026 | 9.64 | Safe |
Source: Calculated from ZM's latest 10-K filing on SEC EDGAR.
What is Zoom Communications, Inc. actually worth?
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $6.06 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Last Year EPS | $6.18 | Annual report (SEC EDGAR) |
| Analyst Consensus EPS (This Year) | $5.87 | 27 analysts consensus |
| Trailing P/E | 14.9x | Current market pricing |
| Fair P/E (β discount) | 12.6x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | Stable | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $97.33 (27 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does Zoom Communications, Inc. have a durable competitive advantage?
Moat rating: 2.9/5.
What makes up ZM's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 2/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 4/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is ZM's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2023 | 4.0% | — |
| 2024 | 6.6% | Rising |
| 2025 | 9.1% | Rising |
| 2026 | 11.5% | Rising |
Source: ROIC calculated from SEC EDGAR filings.
Is Zoom Communications, Inc.'s dividend safe?
Zoom Communications, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $4.9B | $4.7B | $4.4B | Rising |
| Net Income | $1.9B | $1.0B | $0.1B | Rising |
| Free Cash Flow | $1.9B | $1.8B | $1.2B | Rising |
| Gross Margin | 77.0% | 75.8% | 75.0% | Stable |
Recent events that affect our ZM analysis
ZM earnings report scheduled
Upcoming report. Consensus EPS estimate: $1.42. Revenue estimate: $1.22B. Our current Fair Value: $76.36 — a significant beat or miss could shift this estimate.
ZM analyst consensus: 57% bullish (16 of 28 analysts)
2 Strong Buy, 14 Buy, 10 Hold, 1 Sell, 1 Strong Sell. Consensus target: $97.33 (5.9% upside). Compare with our independent Fair Value: $76.36.
ZM beat EPS estimates by 162.2%
Reported EPS: $2.22 vs estimate $0.85. Earnings strength supports our Fair Value of $76.36 (16.9% below current price).
ZM beat EPS estimates by 148.2%
Reported EPS: $2.01 vs estimate $0.81. Earnings strength supports our Fair Value of $76.36 (16.9% below current price).
ZM beat EPS estimates by 62.0%
Reported EPS: $1.16 vs estimate $0.72. Earnings strength supports our Fair Value of $76.36 (16.9% below current price).
ZM beat EPS estimates by 30.2%
Reported EPS: $0.81 vs estimate $0.62. Earnings strength supports our Fair Value of $76.36 (16.9% below current price).
ZM beat EPS estimates by 91.1%
Reported EPS: $1.16 vs estimate $0.61. Earnings strength supports our Fair Value of $76.36 (16.9% below current price).
Common questions about Zoom Communications, Inc.
What is Zoom Communications, Inc. stock price today?
Zoom Communications, Inc. (ZM) stock price is $91.92 as of the latest market close, traded on the NASDAQ exchange.
What does Zoom Communications, Inc. do?
Zoom Communications, Inc. provides an Artificial Intelligence-first open work platform for human connection in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It offers Zoom Meetings that offers HD video, voice, chat, and content sharing through mobile devices, desktops, laptops, telephones, and conference room systems; Zoom Phone, a cloud phone system; and Zoom Team Chat enables users to share messages, images, files, and content in desktop, laptop, tablet, and mobile devices.
What is Zoom Communications, Inc. market cap?
Zoom Communications, Inc. has a market capitalization of $27.22B, classifying it as a large-cap stock in the Technology sector.
What sector and industry is ZM in?
Zoom Communications, Inc. operates in the Technology sector, specifically within the Software - Application industry. It trades on the NASDAQ under the ticker symbol ZM.
Is ZM stock overvalued or undervalued?
Based on our valuation model, Zoom Communications, Inc. trades 20.4% above our fair value estimate — potentially overvalued.
- FairValueLabs Fair Value: $76.36
- Current Price: $91.92
- Valuation Zone: Overvalued
What is ZM stock forecast and analyst target price?
Based on 27 Wall Street analysts, the consensus price target for Zoom Communications, Inc. is $97.33, implying upside of 5.9% from the current price.
- Analyst High Target: $115.00
- Analyst Low Target: $66.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is Zoom Communications, Inc. revenue and earnings growing?
Here are the analyst consensus growth estimates for Zoom Communications, Inc.:
- Revenue growth (current year est.): 4.2%
- EPS growth (current year est.): -0.8%
- Revenue growth (next year est.): 4.0%
- EPS growth (next year est.): 4.5%
What are Zoom Communications, Inc.'s key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $4.9B | Rising |
| Net Income | $1.9B | Rising |
| Free Cash Flow | $1.9B | Rising |
| Gross Margin | 77.0% | Stable |
What is ZM's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Trailing P/E (last 12 months): 14.9x
- Forward P/E (next 12 months est.): 15.0x
- FairValueLabs Fair P/E: 12.6x
How volatile is ZM stock?
Zoom Communications, Inc. has a beta of 0.88, meaning it is less volatile than the broader market. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does Zoom Communications, Inc. have?
Zoom Communications, Inc.'s balance sheet shows:
- Total Cash: $7.82B
- Total Debt: $58.5M
- Net Cash Position: $7.76B
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is Zoom Communications, Inc.'s free cash flow?
Zoom Communications, Inc. generated $1.96B in trailing twelve-month free cash flow (from $1.99B in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does Zoom Communications, Inc. pay a dividend?
Zoom Communications, Inc. does not currently pay a regular dividend to shareholders. The company may be reinvesting all profits back into growth, or it may have suspended its dividend.
Is Zoom Communications, Inc. at risk of going bankrupt?
Zoom Communications, Inc.'s Altman Z-Score is 9.64, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does Zoom Communications, Inc. have a durable competitive advantage?
Zoom Communications, Inc. scores 2.9/5 stars (Narrow moat · eroding) in our moat analysis:
- ROIC Stability: 2/5
- Gross Margin Trend: 4/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is ZM's return on equity (ROE)?
Zoom Communications, Inc.'s return on equity is 20.3%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy ZM stock?
ZM shares can be purchased through any brokerage account that provides access to the NASDAQ. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol ZM
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is ZM a value stock or speculative?
FairValueLabs classifies Zoom Communications, Inc. as Value Investment. It exhibits consistent profitability, reasonable valuation, and financial stability — characteristics of a traditional value investment.
Who is the CEO of Zoom Communications, Inc.?
The current CEO of Zoom Communications, Inc. is Mr. Eric S. Yuan.
What is ZM's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $6.18
- Forward EPS (next 12 months est.): $6.14
- Analyst consensus EPS (this year): $5.87
- Analyst consensus EPS (next year): $6.14
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 22, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
ZM analysis methodology: How we calculate fair value, Z-Scores, and moat ratings