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Zoom reports Q1 FY21 revenue of $328M, up 169%. The company reported record EBIT of $23M, and $251M of free cash flow in the quarter. Revenue guidance for the full year has increased to $1.775-$1.8B, implying 187% growth from last year. With a market capitalization of $60B, this implies a 34X forward price/sales ratio. Will Zoom's fundamentals be able to grow fast enough to justify a $200/share price? I'm torn. On one hand, I see huge potential for Zoom to be a digital communication layer connecting our global economy ... on the other hand I see a company that needs to double revenue for the next 2 years (after FY21) to justify its sky high valuation ... what are your thoughts?
By Gali4.8
9898 ratings
Zoom reports Q1 FY21 revenue of $328M, up 169%. The company reported record EBIT of $23M, and $251M of free cash flow in the quarter. Revenue guidance for the full year has increased to $1.775-$1.8B, implying 187% growth from last year. With a market capitalization of $60B, this implies a 34X forward price/sales ratio. Will Zoom's fundamentals be able to grow fast enough to justify a $200/share price? I'm torn. On one hand, I see huge potential for Zoom to be a digital communication layer connecting our global economy ... on the other hand I see a company that needs to double revenue for the next 2 years (after FY21) to justify its sky high valuation ... what are your thoughts?

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