What changed
$ZM — BUY 📊 | 6 MONTHS THESIS
🧭 Conviction: HIGH
🎯 FQ1 FY2027 (ends Apr) | reported May 21 | Rev $1.2B | EPS $1.42 vs $0.82 🟢 | Margin 25.1%
💡 Consensus modeled EPS of $0.82, assuming margin compression and no growth. Zoom delivered $1.42, demonstrating 25.1% operating margins that the market did not anticipate. Even with low single-digit revenue growth, profitability is far ahead of depressed expectations.
📉 Reward/risk: 2.0:1
🏢 Business Quality: 7/10
📊 Valuation: cheap — trailing P/E 15.2x vs mid-20s historical average and peer SaaS multiples of 30-40x; FCF yield 2% is modest but buybacks and margin expansion...
🔮 Catalyst: Next quarterly earnings release (est. August 2026) with upward guidance revisions
💰 Entry: $86.48, stop $75.0, target $110.0
⚖️ Buy: Massive EPS beat reveals underappreciated margin power; at 15x P/E, the stock is mispriced for the profitability, with buybacks providing a floor.