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Zoom Video Communications ROE %

: 27.86% (As of Oct. 2021)
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ROE % is calculated as Net Income attributable to Common Stockholders (Net Income minus dividends to participating security holders) divided by its average Total Stockholders Equity over a certain period of time. Zoom Video Communications's annualized net income attributable to common stockholders for the quarter that ended in Oct. 2021 was $1,361 Mil. Zoom Video Communications's average Total Stockholders Equity over the quarter that ended in Oct. 2021 was $4,886 Mil. Therefore, Zoom Video Communications's annualized ROE % for the quarter that ended in Oct. 2021 was 27.86%.

The historical rank and industry rank for Zoom Video Communications's ROE % or its related term are showing as below:

NAS:ZM' s ROE % Range Over the Past 10 Years
Min: 4.34   Med: 10.78   Max: 29.62
Current: 29.62

4.34
29.62

During the past 5 years, Zoom Video Communications's highest ROE % was 29.62%. The lowest was 4.34%. And the median was 10.78%.

NAS:ZM's ROE % is ranked higher than
92% of the 2354 Companies
in the Software industry.

( Industry Median: 4.37 vs. NAS:ZM: 29.62 )

Zoom Video Communications ROE % Historical Data

The historical data trend for Zoom Video Communications's ROE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Zoom Video Communications Annual Data
Trend Jan17 Jan18 Jan19 Jan20 Jan21
ROE %
- - 10.78 4.34 28.61

Zoom Video Communications Quarterly Data
Jan17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 58.82 38.85 22.59 28.65 27.86

Competitive Comparison

For the Software - Application subindustry, Zoom Video Communications's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Zoom Video Communications ROE % Distribution

For the Software industry and Technology sector, Zoom Video Communications's ROE % distribution charts can be found below:

* The bar in red indicates where Zoom Video Communications's ROE % falls into.



Zoom Video Communications ROE % Calculation

Zoom Video Communications's annualized ROE % for the fiscal year that ended in Jan. 2021 is calculated as

ROE %=Net Income attributable to Common Stockholders (A: Jan. 2021 )/( (Total Stockholders Equity (A: Jan. 2020 )+Total Stockholders Equity (A: Jan. 2021 ))/ count )
=671.527/( (833.943+3860.767)/ 2 )
=671.527/2347.355
=28.61 %

Zoom Video Communications's annualized ROE % for the quarter that ended in Oct. 2021 is calculated as

ROE %=Net Income attributable to Common Stockholders (Q: Oct. 2021 )/( (Total Stockholders Equity (Q: Jul. 2021 )+Total Stockholders Equity (Q: Oct. 2021 ))/ count )
=1361.084/( (4657.748+5113.685)/ 2 )
=1361.084/4885.7165
=27.86 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual ROE %, the net income attributable to common stockholders of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income attributable to common stockholders data used here is four times the quarterly (Oct. 2021) net income attributable to common stockholders data. ROE % is displayed in the 30-year financial page.


Zoom Video Communications  (NAS:ZM) ROE % Explanation

ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.

The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:

ROE %**(Q: Oct. 2021 )
=Net Income/Total Stockholders Equity
=1361.532/4885.7165
=(Net Income / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Stockholders Equity)
=(1361.532 / 4203.024)*(4203.024 / 6743.782)*(6743.782 / 4885.7165)
=Net Margin %*Asset Turnover*Equity Multiplier
=32.39 %*0.6232*1.3803
=ROA %*Equity Multiplier
=20.19 %*1.3803
=27.87 %

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its ROE %.

The factors that affect a company's ROE % can also be illustrated with the five-step DuPont Analysis:

ROE %**(Q: Oct. 2021 )
=Net Income/Total Stockholders Equity
=1361.532/4885.7165
=(Net Income /Pre-Tax Income) * (Pre-Tax Income/Operating Income) * (Operating Income/Revenue) * (Revenue/Total Assets) * (Total Assets/Total Stockholders Equity)
= (1361.532 / 1641.132) * (1641.132 / 1163.428) * (1163.428 / 4203.024) * (4203.024 / 6743.782) * (6743.782 / 4885.7165)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.8296 * 1.4106 * 27.68 % * 0.6232 * 1.3803
=27.87 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Oct. 2021) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Oct. 2021) revenue data. The same rule applies to Pre-Tax Income and Operating Income.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

** The ROE % used above is for Du Pont Analysis only. It is different from the defined ROE % page on our website, as here it uses Net Income instead of Net Income attributable to Common Stockholders in the calculation.


Be Aware

Net income attributable to common stockholders is used.

Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.


Zoom Video Communications ROE % Related Terms

Thank you for viewing the detailed overview of Zoom Video Communications's ROE % provided by GuruFocus.com. Please click on the following links to see related term pages.


Zoom Video Communications Business Description

Zoom Video Communications logo
Industry
Technology » Software NAICS : 511210 SIC : 7372
Traded in Other Exchanges
Address
55 Almaden Boulevard, 6th Floor, San Jose, CA, USA, 95113
Zoom Video Communications provides a communications platform that connects people through video, voice, chat, and content sharing. The company's cloud-native platform enables face-to-face video and connects users across various devices and locations in a single meeting. Zoom, which was founded in 2011 and is headquartered in San Jose, California, serves companies of all sizes from all industries around the world.
Executives
Bawa Aparna officer: Chief Operating Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Pelosi Janine officer: Chief Marketing Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Hammonds Kimberly director 100 EAST DAVIE STREET RALEIGH NC 27601
Crehan Shane officer: Chief Accounting Officer C/O EVENTBRITE, INC. 155 5TH STREET, 7TH FLOOR SAN FRANCISCO CA 94103
Yuan Eric S. director, 10 percent owner, officer: Chief Executive Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Mcmaster Herbert Raymond director C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Steckelberg Kelly officer: Chief Financial Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Gassner Peter P director C/O VEEVA SYSTEMS INC. 4280 HACIENDA DRIVE PLEASANTON CA 94588
Chadwick Jonathan director 3401 HILLVIEW AVENUE PALO ALTO CA 94304
Azus Ryan officer: Chief Revenue Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Swanson Bart director C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Benhorin Roy officer: Chief Accounting Officer C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Sankarlingam Velchamy officer: Pres. of Engineering & Product C/O ZOOM VIDEO COMMUNICATIONS, INC. 55 ALMADEN BOULEVARD, 6TH FLOOR SAN JOSE CA 95113
Subotovsky Santiago director C/O EMERGENCE CAPITAL PARTNERS 160 BOVENT ROAD SUITE 300 SAN MATEO CA 94402
Emergence Equity Partners Iii, L.p. 10 percent owner 160 BOVET ROAD, SUITE 300 SAN MATEO CA 94402

Zoom Video Communications Headlines

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