Software - Application · NASDAQ
Current Price
$95.76
Intrinsic Value
Use the calculator below to estimate
Run a PE ratio stock valuation on Zoom Communications, Inc. with auto-filled earnings data, adjustable target PE, and instant fair value estimate.
Zoom Communications, Inc. engages in the provision of a communications and collaboration platform. It operates through the following geographical segments: Americas, Asia Pacific, and Europe, Middle East, and Africa. The company was founded by Eric S. Yuan in 2011 and is headquartered in San Jose, CA.
Earnings Yield
6.69%
ROE (TTM)
20.6%
Based on trailing twelve-month data, ZM has earnings per share of N/A and trades at a PE ratio of N/A. These are key inputs for stock valuation using the PE ratio method.
The trailing twelve-month PE ratio of ZM reflects how much investors pay per dollar of Zoom Communications, Inc.'s earnings. This metric is most useful when compared to Software - Application peers and the company's own historical range.
Whether ZM is overvalued depends on comparing its PE ratio to Software - Application peers, historical averages, and growth expectations. A PE above the sector average may indicate overvaluation, but high-growth companies often command premium multiples. Consider pairing PE analysis with a DCF model for a more complete picture.
To value Zoom Communications, Inc. using PE: (1) Compare the current PE against the Software - Application median to assess relative pricing, (2) check the PEG ratio to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
The PEG ratio divides the PE ratio by the expected earnings growth rate, providing a growth-adjusted valuation metric. A PEG below 1.0 may indicate undervaluation relative to growth, while above 2.0 may suggest overvaluation. PEG is most reliable for companies with stable, predictable earnings growth.
PE ratio gives a quick relative read — how ZM is priced versus Software - Application peers. DCF provides an absolute value based on projected free cash flows. For ZM, with a strong ROE of 20.6%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
