ZMZoom Communications, Inc.
Is the business good?
A genuinely good business: earnings fully cash-backed (2.2×), margins widening, and elite returns on assets.
Mixed fundamental signals. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 22% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is ZM?
Zoom Communications, Inc. earns 23% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 14 points above what the capital costs: growth creates value
- Operating margin
- 24%
Operating margin · Software - Application median 6.4% · 12 months to Q2 2027
- Cash conversion
- 2.17×
Cash conversion · 2.48× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −2.8%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2021 | 25% |
| FY2022 | 26% |
| FY2023 | 5.6% |
| FY2024 | 12% |
| FY2025 | 17% |
| FY2026 | 23% |
Details›
- Gross margin12 months to Q2 2027
- 77%
- Operating margin12 months to Q2 2027
- 24%
- Net margin12 months to Q2 2027
- 65%
- Free cash flow margin
- 39%
- R&D as % of revenue
- 18%
- Revenue, trailing twelve months
- $4.99B
- Free cash flow, trailing twelve months
- $1.93B
- Net income, trailing twelve months
- $3.26B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 23%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Software, Application
Ranks #32 of 96 by RyuScore