Zoom Communications (ZM) has drawn fresh attention after changing its name from Zoom Video Communications in November 2024. The move highlights its broader push beyond video conferencing into a wider work platform.
Recent trading shows mixed momentum, with the 1-day share price return of 1.19% coming after a 90-day share price decline of 13.99%. At the same time, total shareholder return of 10.03% over one year and 44.83% over three years points to a rebuilding story for Zoom Communications rather than a straight-line recovery.
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After a sharp reset over five years, followed by solid total returns in the last three, and a fresh pivot toward a broader work platform, does Zoom Communications still offer a payoff that justifies the risk at around $89.88 a share?
Most Popular Narrative: 24% Undervalued
Against a fair value estimate of $118.24, Zoom Communications at $89.88 screens as materially cheaper in the most followed narrative. That gap hinges on how durable its enterprise and AI monetisation story really is.
Strong and accelerating adoption of AI powered features across Zoom Communications, including AI Companion, custom AI Companion and ZoomMate, with paid monthly active users of Workplace AI features up 125% year over year and AI Companion paid MAUs up 184% year over year, supports a view that AI usage is now translating into both indirect monetisation through lower churn and upsell and direct monetisation through paid SKUs. This can lift revenue growth and support high gross margins near the 80% long term target.
See why 77 investors see Zoom Communications as 24% undervalued.
Result: Fair Value of $118.24 (UNDERVALUED)
Still, the Zoom Communications story carries real risk if competition from bundled suites squeezes pricing power or if heavier AI compute costs erode those high margin targets.
Find out about the key risks to this Zoom Communications narrative.
Next Steps
Mixed signals around Zoom Communications can feel messy, so move quickly, review the detailed information, weigh both the upside and the hazards, and ground your view in the 4 key rewards and 2 important warning signs.
Looking for more investment ideas beyond Zoom Communications?
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