Zoom (ZM, $66.39) makes a stellar stock market debut
Video conferencing software company Zoom debuted on NASDAQ on Thursday surging 80% to $65 and closing out the day up 72% at $62. At that price, the stock market is valued at $15.9 billion.
Unlike other players who debuted in this season like Lyft, Zoom is a profitable business. After filing for the IPO, the company estimated its share price range between $28 to $32, but it beat its own estimate and increased its range to $32-$35 with a company valuation of $9.2 billion. It earned it earned $7.58 million in net income last year with revenue surging to 118% to $330.5.
Analysts believe that with these figures, Zoom could become the benchmark for videoconferencing. It generated rapid growth with both cash and GAAP profitability as well as enterprise traction.
At its opening price, Zoom is priced at more than 50 times its enterprise value, the highest multiple by far for U.S. software companies. The share would trade under the ticker name “ZM”. At its opening price, Zoom is valued at about 50 times its enterprise value, which is by far the highest multiple for U.S. software companies.
ZM's RSI Indicator recovers from overbought zone
The 10-day RSI Indicator for ZM moved out of overbought territory on May 23, 2023. This could be a sign that the stock is shifting from an upward trend to a downward trend. Traders may want to look at selling the stock or buying put options. Tickeron's A.I.dvisor looked at 29 instances where the indicator moved out of the overbought zone. In of the 29 cases the stock moved lower in the days that followed. This puts the odds of a move down at .
Technical Analysis (Indicators)
Bearish Trend Analysis
ZM moved below its 50-day moving average on May 23, 2023 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ZM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
ZM broke above its upper Bollinger Band on May 22, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
The Momentum Indicator moved above the 0 level on May 25, 2023. You may want to consider a long position or call options on ZM as a result. In of 71 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for ZM just turned positive on May 08, 2023. Looking at past instances where ZM's MACD turned positive, the stock continued to rise in of 35 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ZM advanced for three days, in of 227 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 190 cases where ZM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. ZM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.021) is normal, around the industry mean (31.382). ZM's P/E Ratio (3333.333) is considerably higher than the industry average of (167.504). Projected Growth (PEG Ratio) (3.341) is also within normal values, averaging (4.103). Dividend Yield (0.000) settles around the average of (0.033) among similar stocks. P/S Ratio (4.548) is also within normal values, averaging (70.837).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ZM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 89, placing this stock worse than average.
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
