If you have ever wondered whether Zoom Communications is still a bargain or if the easy money is long gone, you are exactly who this breakdown is for.
Despite a bruising 5 year journey with the share price down 76.1%, the stock has quietly climbed 0.3% over the last week, 14.2% over the past month, and 10.1% year to date, leaving it 4.9% higher than a year ago.
Recent headlines have focused on Zoom pushing beyond its pandemic image, with the company investing heavily in AI driven collaboration tools and expanding its enterprise focused product suite. At the same time, market chatter has shifted toward whether Zoom can cement a durable role in the broader unified communications space as competition intensifies.
On our numbers, Zoom scores a solid 5 out of 6 across key undervaluation checks. This sets the stage for a closer look at how different valuation methods stack up and, more importantly, how a deeper narrative driven framework can give you an even clearer view by the end of this article.
Find out why Zoom Communications’s 4.9% return over the last year is lagging behind its peers.
A Discounted Cash Flow model estimates what a company is worth today by projecting the cash it can generate in the future and discounting those cash flows back to the present.
For Zoom Communications, the latest twelve month free cash flow stands at about $1.94 billion. Analysts project free cash flow to stay around the $1.9 billion to $2.2 billion range over the next decade, with Simply Wall St extending analyst forecasts beyond year five using a steady, modest growth rate that takes projected free cash flow to roughly $2.53 billion by 2035.
Feeding these cash flow projections into a 2 Stage Free Cash Flow to Equity model yields an intrinsic value estimate of about $122.83 per share. Compared with the current market price, this implies the stock is trading at roughly a 26.9% discount, which indicates investors may not be fully pricing in Zoom Communications future cash generation potential.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Zoom Communications is undervalued by 26.9%. Track this in your watchlist or portfolio, or discover 912 more undervalued stocks based on cash flows.
ZM Discounted Cash Flow as at Dec 2025
For profitable companies like Zoom Communications, the price to earnings ratio is a useful shorthand for how much investors are willing to pay today for each dollar of current earnings. It naturally ties valuation to profitability, which makes it more intuitive than sales or book based measures when earnings are positive and reasonably stable.
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