ZM
Zoom Communications, Inc.
$92.92
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 9.6% below fair value
You pay
$92.92
Bear
$92.39
Fair
$102.83
Bull
$111.86
Bear
$92.39
-0.6%
3% stage 1 growth, 11% discount
Fair
$102.83
+10.7%
5% stage 1 growth, 11% discount
Bull
$111.86
+20.4%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
14.4x
Market is pricing in (growth)
4.5%
vs 5.2% base
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 $118.50 from 49 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $102.83 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