Critical Survey: Zoom Video Communications (ZM) vs. Its Rivals

Zoom Video Communications (NASDAQ: ZM) is one of 59 publicly-traded companies in the “Computer programming, data processing, & other computer related” industry, but how does it weigh in compared to its rivals? We will compare Zoom Video Communications to related companies based on the strength of its earnings, valuation, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current recommendations for Zoom Video Communications and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zoom Video Communications 2 14 8 0 2.25
Zoom Video Communications Competitors 959 3233 6427 319 2.56

Zoom Video Communications currently has a consensus price target of $98.78, suggesting a potential downside of 28.48%. As a group, “Computer programming, data processing, & other computer related” companies have a potential upside of 125.67%. Given Zoom Video Communications’ rivals stronger consensus rating and higher probable upside, analysts plainly believe Zoom Video Communications has less favorable growth aspects than its rivals.

Profitability

This table compares Zoom Video Communications and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zoom Video Communications 3.73% 3.30% 2.23%
Zoom Video Communications Competitors -4.23% -54.08% -3.57%

Insider and Institutional Ownership

22.6% of Zoom Video Communications shares are held by institutional investors. Comparatively, 52.8% of shares of all “Computer programming, data processing, & other computer related” companies are held by institutional investors. 14.7% of shares of all “Computer programming, data processing, & other computer related” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Zoom Video Communications and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Zoom Video Communications $622.66 million $21.75 million 1,534.56
Zoom Video Communications Competitors $8.32 billion $1.62 billion 43.79

Zoom Video Communications’ rivals have higher revenue and earnings than Zoom Video Communications. Zoom Video Communications is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Zoom Video Communications rivals beat Zoom Video Communications on 8 of the 12 factors compared.

About Zoom Video Communications

Zoom Video Communications, Inc. provides a video-first communications platform that changes how people interact primarily in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. It connects people through frictionless video, voice, chat, and content sharing. The company's cloud-native platform enables face-to-face video experiences and connects users across various devices and locations in a single meeting. It serves education, entertainment/media, enterprise infrastructure, finance, healthcare, manufacturing, non-profit/not for profit and social impact, retail/consumer products, and software/Internet industries, as well as individuals. The company was formerly known as Zoom Communications, Inc. and changed its name to Zoom Video Communications, Inc. in May 2012. Zoom Video Communications, Inc. was founded in 2011 and is headquartered in San Jose, California.

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