Quality Investor

Zoom Communications, Inc.

Rank #237Capital ReturnWatchlistCompare with other stocks

ZM · Nasdaq · Technology

Zoom Communications, Inc. (ZM) — Rank #237 by gross profitability (GP/assets 0.28) · ROE 16.8% · Piotroski F-Score 6 / 9.

As-of 2026-10-30 · CIK 0001585521 · all metrics point-in-time as of the filing date.

About

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.

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The company 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. It also provides Zoom Docs, a modular workspace; Zoom Whiteboard, an interactive canvas; Zoom Clips for capturing video and screen content; Zoom Rooms, a software-based conference room system; and Workspace Reservation. In addition, the company offers Zoom Contact Center, an omnichannel solution; Zoom Revenue Accelerator, a conversation intelligence software for Zoom Meetings and Zoom Phone; Zoom Events to manage, host, market, and report on all of virtual and hybrid events; Zoom Webinars Plus; and Zoom Webinars which supports interactive video presentations to large audiences. Further, it provides Workvivo, an all-in-one employee experience platform; Zoom Developer Platform and App Marketplace which integrates platform with other applications, platforms, websites, and services; and Zoom Apps. It serves individuals; and education, entertainment/media, enterprise infrastructure, finance, government, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries. The company was formerly known as Zoom Video Communications, Inc. and changed its name to Zoom Communications, Inc. in November 2024.

The company was incorporated in 2011 and is headquartered in San Jose, California.

Industry
Software - Application
Sector
Technology
State
DE
Filer Category
Large accelerated filer
Fiscal Year End
January 31
Website
zoom.com

Company Snapshot

P/E and reverse DCF are the primary valuation lenses at this stage.

Market Cap

—

P/E (annual)

—

P/S (annual)

—

P/B

—

P/OCF (annual)

—

Shareholder Yield

—

Employees

7,438

Industry

Software - Application

Exchange

Nasdaq

12/12

Flags passed

ZM passes 12/12 quality flags

  • PASS
    Gross margin holding
  • PASS
    Dilution within 2%
  • PASS
    FCF not negative from investment
  • PASS
    Disclosure consistent
  • PASS
    Revenue not declining
  • PASS
    Operating margin holding
  • PASS
    Free cash flow intact
  • PASS
    Passes safety gate
  • PASS
    Balance sheet stable
  • PASS
    No competitive retreat
  • PASS
    SBC not compressing margin
  • PASS
    No valuation convergence

Strengths Revenue growth accelerating · Operating leverage expanding · Deferred revenue growing · RPO outpacing revenue · Sequential beat (rev + EPS)

A count of the 12 warning flags that could be evaluated. Unweighted: colour follows the worst flag.

Quality Profile

Profitability

1/1 pass
GP / assets
0.28
Return on equity
16.8%
Gross margin trend
PASS

Safety

1/1 pass
Balance-sheet safety
PASS
Debt / equity
0.20
Current ratio
3.83×
Net cash
$11.04B

Cash Flow

3/3 pass
Positive FCF
PASS
Cash-backed earnings
PASS
Accruals healthy
PASS
SBC / revenue
15.6%

Growth

2/2 pass
Revenue growth
4.4%
Piotroski F-Score
6 / 9
Share dilution
-2.5%

FCF yield, shareholder yield, and buyback activity are the primary reads at this stage.

Profitability

Does it make money well?

No warning flags · GP/assets 0.28

Gross profitability (GP / assets)

0.28

Primary signal (Novy-Marx).

10th of 15 SIC 7370 peers

Return on equity

16.8%

Gross margin

77.0%

6th of 15 SIC 7370 peers

Revenue growth (YoY)

4.4%

RPO growth (YoY)

10.1%

Remaining performance obligations growth — RPO > revenue = forward demand building.

Gross margin improving

Margin trend vs prior year.

PASS

Operating Leverage

2023202420252026
Revenue vs COGS
Revenue vs OpEx
Op. Income vs Revenue

Growth

Revenue CAGR (3Y)

3.5%

Revenue CAGR (5Y)

12.9%

Earnings CAGR (3Y)

163.6%

FCF CAGR (3Y)

17.5%

Cash Flow Health

Is the cash real?

No warning flags · FCF 1% above net income

Free cash flow

$1.92B

Operating cash flow minus capex.

Positive free cash flow

PASS

FCF vs net income

1.3%

(FCF − net income) ÷ |net income|. Positive: cash above earnings. Negative: below.

FCF not below net income

Fails when free cash flow is below net income (yellow flag).

PASS

Accruals healthy

Cash-backed earnings.

PASS

SBC / revenue

15.6%

Stock-based comp intensity.

Balance Sheet Strength

Can it survive a storm?

No warning flags · net cash $11.04B, F-Score 6/9

Balance-sheet safety

Composite anti-fragile check.

PASS

Debt / equity

0.20

2nd of 14 SIC 7370 peers (best = lowest)

Current ratio

3.83×

5th of 15 SIC 7370 peers

Quick ratio

3.67×

Net cash

$11.04B

Cash & equivalents minus total debt.

Piotroski F-Score

6 / 9

Fundamental-strength score (0-9).

Valuation

Is the price reasonable?

No warning flags

Capital allocation quality

Composite score

4.0 / 5

Strong
Share count trend(net buybacks)
-2.5%4/5 Strong
Buyback timing
N/AN/A
Dividend growth consistency(non-payer or broken streak)
0 yr3/5 Good
Net debt trajectory(deleveraging)
8.5%5/5 Strong

Lifecycle Phase History

20212026
Hypergrowth
Value
Capital Return

Price History

ZM-69.4% · -21.0% CAGRSPY+82.9% · +12.8% CAGR