Zoom Communications (ZM) Stock Analysis & Winston Score

Zoom Communications, Inc. engages in the provision of a communications and collaboration platform. It operates through the following geographical segments: Americas, Asia Pacific, and Europe, Middle East, and Africa. The company was founded by Eric S. Yuan in 2011 and is headquartered in San Jose, CA.

Winston Score History

Politician Trades

2 trades / 12mo

0 Congressional buys and 2 sells on ZM in the last 12 months.

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Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+5.3% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+89.2% YoY

YoY Growth Rate

Strong earnings growth

R&D Spend

$845M/ year

→ Flat (-1% vs prior year)

17.4% of revenue

In line with sector average (15%)

Steady R&D investment year-over-year

Insider Activity

9.9%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.3B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Zoom Communications is growing revenue at 5% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.5% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 305.8M (2022) → 307.3M (2026)

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

76.3%

Premium pricing power — 76.3% gross margin

Operating Margin

20.0%

Excellent — 20.0% operating margin

ROCE

2.5%

Weak — 2.5% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+4.7%

Slow sales growth (4.7% YoY)

EPS YoY

+109.4%

Earnings growing fast (109.4% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

96%

Turns 96% of profit into real cash

FCF Margin

38.5%

Converts sales into free cash efficiently (38.5%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

N/A

Data not available

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

13.6x

Attractive valuation — P/E 13.6

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+0.5

GROWING

Earnings roughly flat

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Dividends

Not applicable for this business.

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