ZM - Zoom: A Decline That Makes Little Sense Buy Confidently Here (Upgrade)

2024-07-15 12:28:29 ET

Summary

• Zoom stock has dropped nearly 20% year to date, dramatically underperforming the S&P 500 and forming a good contrarian buy opportunity.
• Despite weaker share prices, the company has actually lifted its guidance for the current year and trades at an incredible valuation of 7x P/E ex-cash.
• Zoom's revenue is still growing, with mid-single-digit RPO growth suggesting a healthy pipeline going forward.
• Upgrading Zoom to a strong buy rating.

While the stock market has supercharged its way to new all-time highs, one major tech stock has been decidedly going the other way: Zoom ( ZM ). It's difficult to imagine now that only a few years ago during the peak of COVID, Zoom was once one of the hottest trades on Wall Street. Despite the fact that Zoom still powers the modern fabric of how we work in a hybrid manner today, Zoom remains the pariah of the tech sector....

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