Is Zoom (ZM) way overvalued or am I missing something?

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by Maxet1000

I think maybe I need a bull’s perspective on why this stock should have the valuation it has right now. The current PE is over 2000 and even if they keep growing at the rate they have been, some quick math ( high earnings forecast on yahoo) tells me it wouldn’t go below 221 for 2022.

The Company seems fine, altough I think the security flaws ( that are probly fixed now) will probly have detered a lot of companies. At their current prices they would need 110 mil companies using the platform to get a PE of 60, if we’d assume a crazy 30% profit margin ( current profit margin is 2%). Imagine every paid user has 4 other ppl in the same call. That would give half a billion people using zoom. Even right now, with the lock down, that would be crazy.

Google has recently made Hangouts basicly free and Microsoft’s Teams and Skype also look like tough competition for a startup.

It feels like the market is priced to the best of the best scenario, but maybe I’m just missing something?

I’ve been thinking of selling call (probly strike 200- 250) options that expire jan 2022. Would be a very nice profit if the stock goes down or even sideways, and this way I don’t have to nail the timing. Edit: The reason I want to sell leaps is that I can’t short stocks where I live and this mimics it well, pls tell me if I can do something better I’m still new to options.

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.

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