Research on Zoom’s Investment Decisions Based on Multiple Valuations

Zhihao Guo

doi:10.54691/bcpbm.v26i.2080

Authors

Zhihao Guo

DOI:

https://doi.org/10.54691/bcpbm.v26i.2080

Keywords:

Zoom’s valuation, Multiples valuation method, Adjustment to valuation results

Abstract

Due to the globally epidemic disease, the need for online working and studying has been increasing drastically more than ever. As a rising star and a leading company in the online meeting segment of internet industry, Zoom’s stock price has been septupled in merely 18 months. However, with the recovery of covid-19 and resuscitation of offline work, Zoom’s stock price has been fallen continually to only 38% higher than its original price. The valuation of Zoom’s stock price can be a very useful flag for investors who want to invest in this company, since its stock price’s volatility is especially big. Therefore, this research uses multiples valuation method to evaluate whether Zoom’s stock price is over-valued or under-valued or fair. Comparing to Zoom’s actual stock price and enterprise value, all the three valuation methods suggest that Zoom is highly over-valued right now. Therefore, it concludes that Zoom’s stock price will be continually falling in the foreseeable future. It implies that investors should be careful when considering investing in Zoom, since Zoom is not making any material progress in current situation and evaluation results are really negative regarding Zoom’s stock price.

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