ZM
Zoom Communications, Inc.
$105.64
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 4.3% above fair value
You pay
$105.64
Bear
$91.01
Fair
$101.30
Bull
$110.19
Bear
$91.01
-13.9%
3% stage 1 growth, 11% discount
Fair
$101.30
-4.1%
5% stage 1 growth, 11% discount
Bull
$110.19
+4.3%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
17.3x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $114.54 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $101.30 per share.
Warnings
Stock-based employee pay equals 40% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions