$Zoom(ZM)$ rose over 16% after earnings

$Zoom(ZM)$ rose over 16% after earnings data released on August 21th.

Zoom Video in 4 charts

1 Revenue rocketed in Covid. Reached $4.5B. Not growing much (2%)

2 FCF dropped to $1B a year ago, has risen strongly to $1.7B. About a third of rev. Healthy

3 How did it go up? SG&A / rev dropped by 10%, so EBIT mgn went up by 10%. GP mgn & R&D/rev stable.

4 Nice to see SBC coming down. But it’s still VERY high at $980M (compared to $1.7B FCF). Share count ticking up. Last 1.5y it’s up 6%. But has ticked down a bit recently.

Discussion:

FCF after deducting SBC is $720M Let’s say their SG&A efficiencies continue and call it a round number of $1B

Low growth, low moat, let’s say 10% yield (or 10x FCF) So $10B EV But they have a massive war chest of $7.5B in cash So Mkt cap of $17.5B should be fair.

Current Mkt cap is $21B Implies EV is about $13.5B or 13.5x our $1B FCF after SBC

Seems to be in fairly valued territory.

I’ve owned a tiny position for years.

I wouldn’t be buying here. Charts from @KoyfinCharts