Zoom: Great Entry Point As Growth Firms Up

Gary Alexander33.39K FollowersFollow5ShareSavePlay(9min)CommentsSummaryZoom remains a fundamentally secure business, with stable growth, strong retention, and a growing enterprise customer base.ZM trades at attractive post-earnings multiples—9.6x EV/FY27 FCF and 14.1x P/E—supported by a debt-free balance sheet and significant cash.FY27 guidance surpasses consensus, with 4.1% revenue growth and 40.5% pro forma operating margin, though FCF is guided down 11% year-over-year.I moderate my rating to 'buy' from 'strong buy' as Zoom's valuation discount versus peers has narrowed amid widespread software sector weakness. Morsa Images/DigitalVision via Getty Images So far in 2026, few software stocks have escaped the so-called "SaaSpocalypse," or the notion that agentic AI is coming to unseat virtually all incumbent enterprise software companies. Zoom (ZM) has been oneThis article was written byGary Alexander33.39K FollowersFollowWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.Analyst’s Disclosure: I/we have a beneficial long position in the shares of ZM either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.