Skip to main content
No. of Recommendations: 56
How fast is it changing?
At $105/share (last week) the market cap was $31 billion.
At $130/share (Friday) it was $38 billion.
At $150/share (earlier today), it is about $44 billion.
...I can't keep up.

Revenue Assumption: INSANE GROWTH FOR TWO YEARS
Let's say ZM revenue doubles this year and again next year, and they end up with about $2 billion in revenue at the end of 2021. That's 100% YoY at great scale. No small feat! Perhaps unprecedented!

If the stock didn't move (for almost 2 years), they would have a PS of 20 at the end of 2021. Seems pretty reasonable, but that means no gains from today's price.

If the stock price continues to soar, say if it reaches $300/share by the end of 2021, the PS would still be 40. If that should happen, they would be expected to grow at near-100% on a revenue base of $2 billion. Frankly, I just don't see it.

What if ZM's share price goes up a respectable 25% the rest of this year, and the same in 2021? That would put it at about $235/share at the end of 2021. That would still put the PS at about 35. Not much different than the example above.

Conclusions (if any)
Heck, the valuation could go to $100 billion for all I know. But based on what, other than momentum?

I don't know how to value this stock. I said earlier that I will hold whatever amount I feel comfortable holding and enjoy the ride. It's only a mid-sized position, but as the stock goes higher and higher, I will trim it. I just see less and less room to profit long term.

I'd love to hear an alternate perspective on what they could be worth, and when.

Bear
Print the post  

Announcements

READ THIS BEFORE POSTING
Enter text here. Please keep promos short.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.