Zoom Video Communications Inc. (NASDAQ: ZM): Hunting Genuine Value In Market Debris


Morgan Stanley Investment Managem. recently announced the acquisition of new stake in Zoom Video Communications Inc. (NASDAQ:ZM). The institutional investor has increased its shareholding in the Communication Services company by 28.35% to 10.21 million shares with purchase of 2.26 million shares. This fresh investment now brings its stake to 5.61% valued currently at $2.59 billion. In addition, The Vanguard Group, Inc. raised its holdings by 6.21 million to 10.08 million shares. And Renaissance Technologies LLC has lifted its position by 161.24% or 4.48 million shares – to 7.26 million shares.

With over 6.45 million Zoom Video Communications Inc. (ZM) shares trading Monday and a closing price of $282.28 on the day, the dollar volume was approximately $1.82 billion. The shares have shown a positive weekly performance of 6.06% and its price on 08/24/20 lost nearly -2.55%. Currently, there are 279.89M common shares owned by the public and among those 161.27M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 32 analysts who have offered their price forecasts for ZM have a consensus price objective of $232.68. The analysts have set the share’s price value over the next 12 months at a high of $300.00 and a low of $156.25 should the stock experience a downside. Incidentally, analysts’ outlook for the Zoom Video Communications Inc. stock is 2.60 for the next 12 months. The average price target is -21.81% below its last price level and a downside to the estimated low will see the stock lose -80.66% over that period. But an upside of 5.91% will see the stock hit the forecast high price target while mean target price for the stock is $235.00.

Insiders at the company have transacted a total of 154 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 20 of these insider trades were purchases, accounting for 1,004,772 shares. Insider sales of the common stock occurred on 134 occasions, with total insider shares sold totaling 1,503,387 shares.

The top 3 mutual fund holders in Zoom Video Communications Inc. are Vanguard Total Stock Market Index, Morgan Stanley Instl. Fund-Growth, and Morgan Stanley Invt. Fds. – Globa. Vanguard Total Stock Market Index owns 4.52 million shares of the company’s stock, all valued at over $1.15 billion. The company sold 12930.0 shares recently to bring their total holdings to about 2.48% of the shares outstanding. Morgan Stanley Instl. Fund-Growth bought 0.85 million shares to see its total holdings expand to 2.36 million shares valued at over $598.26 million and representing 1.29% of the shares outstanding. Morgan Stanley Invt. Fds. – Globa bought 0.57 million shares to bring its total holdings to over 1.96 million shares at a value of $496.45 million. Morgan Stanley Invt. Fds. – Globa now owns shares totaling to 1.07% of the shares outstanding.

Shares of Zoom Video Communications Inc. (NASDAQ: ZM) opened at $293.00, up $3.32 from a prior closing price of $289.68. However, the script later closed the day at $282.28, down -2.55%. The company’s stock has a 5-day price change of 6.06% and 72.12% over the past three months. ZM shares are trading 314.87% year to date (YTD), with the 12-month market performance up to 208.07% higher. It has a 12-month low price of $60.97 and touched a high of $295.97 over the same period. Currently, 6.45 million shares have been traded, compared to an average intraday trading volume of 8.97 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 8.51%, 10.10%, and 90.29% respectively.

Institutional ownership of Zoom Video Communications Inc. (NASDAQ: ZM) shares accounts for 59.60% of the company’s 279.89M shares outstanding. Mutual fund holders own 3.56%, while other institutional holders and individual stakeholders account for 35.84% and 23.07% respectively.

It has a market capitalization of $79.91B. The stock’s trailing 12-month PE ratio is 1559.56, while the earnings-per-share (ttm) stands at $0.18. The company has a PEG of 40.55 and a Quick Ratio of 1.70 with the debt-to-equity ratio at 0.00. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.91% over the week and 4.83% over the month.

Analysts forecast that Zoom Video Communications Inc. (ZM) will achieve an EPS of $0.45 for the current quarter, $0.35 for the next quarter and $1.57 for 2022. The lowest estimate earnings-per-share for the quarter is $0.38 while analysts give the company a high EPS estimate of $0.54. Comparatively, EPS for the current quarter was $0.08 a year ago. Earnings per share for the fiscal year are expected to increase by 271.40%, and 20.64% over the next financial year.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 32 brokerage firm advisors rate Zoom Video Communications Inc. (ZM) as a “Moderate Buy” at a consensus score of 2.60. Specifically, 11 Wall Street analysts polled rate the stock as a buy, while 13 of the 32 advise that investors “hold,” and 5 rated it as a “Sell.”

Looking at the support for the ZM, a number of firms have released research notes about the stock. RBC Capital Mkts stated their Outperform rating for the stock in a research note on August 18, 2020, with the firm’s price target at $250-$300. Wolfe Research coverage for the Zoom Video Communications Inc. (ZM) stock in a research note released on July 24, 2020 offered a Peer Perform rating with a price target of. Goldman was of a view on June 24, 2020 that the stock is Sell, while Bernstein gave the stock Outperform rating on June 10, 2020, issuing a price target of $157- $228. RBC Capital Mkts on their part issued Outperform rating on June 03, 2020.


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