Zoom CommunicationsXSWX:ZM +0.85%85 Return-on-Tangible-Equity is 18.05% as of Apr. 2026, which is 45% above its 10-year median of 12.47. GuruFocus rates XSWX:ZM with a GF Score™ of 85/100 and a GF Value™ of CHF63.80. The stock has 3 warning signs investors should review. Among 2,474 Software companies, Zoom Communications ranks better than 70.17% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Zoom Communications's annualized net income for the quarter that ended in Apr. 2026 was CHF1,341 Mil. Zoom Communications's average shareholder tangible equity for the quarter that ended in Apr. 2026 was CHF7,428 Mil. Therefore, Zoom Communications's annualized Return-on-Tangible-Equity for the quarter that ended in Apr. 2026 was 18.05%.
The historical rank and industry rank for Zoom Communications's Return-on-Tangible-Equity or its related term are showing as below:
XSWX:ZM'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 1.76 Med: 12.47 Max: 28.8
Current: 23.06
During the past 10 years, Zoom Communications's highest Return-on-Tangible-Equity was 28.80%. The lowest was 1.76%. And the median was 12.47%.
XSWX:ZM's Return-on-Tangible-Equity is ranked better than 70.17% of 2474
companies
in the Software industry
Industry Median: 8.785
vs XSWX:ZM: 23.06
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity 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 Return-on-Tangible-Equitys can be extremely high.
Zoom Communications Return-on-Tangible-Equity Related Terms
Zoom Communications Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Zoom Communications's Return-on-Tangible-Equity 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.
XSWX:ZM vs FICO, TEAM, ROP: Return-on-Tangible-Equity Comparison
For the Software - Application subindustry, Zoom Communications's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Communications Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, Zoom Communications's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Zoom Communications's Return-on-Tangible-Equity falls into.
* 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 Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Apr. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 18.05% mean?
Zoom Communications (XSWX:ZM) has a Return-on-Tangible-Equity of 18.05% as of Apr. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Zoom Communications and its competitors. This is 45% above median its historical median of 12.47. Over the past decade, Zoom Communications' Return-on-Tangible-Equity has ranged from 1.76 to 28.80. According to the industry distribution chart, Zoom Communications ranks #738 out of 2474 companies in the Software industry, placing it in the top 29.8%.
Is Zoom Communications' Return-on-Tangible-Equity too high?
Zoom Communications' current Return-on-Tangible-Equity of 18.05% is 45% above median its 10-year median of 12.47. Over the past 10 years, this metric has ranged from a low of 1.76 to a high of 28.80. The Software industry median Return-on-Tangible-Equity is 8.79. Zoom Communications' value of 18.05% is 105.5% above this industry median. Based on the distribution chart, Zoom Communications ranks #738 out of 2474 companies in the Software industry, which is above the industry midpoint. Overall, Zoom Communications has a GF Score™ of 85/100, reflecting its overall financial health beyond just this single metric.
How does Zoom Communications' Return-on-Tangible-Equity compare to FICO and TEAM?
According to the Software industry distribution chart, Zoom Communications ranks #738 out of 2474 companies for Return-on-Tangible-Equity. This puts Zoom Communications in the upper half of its industry. The industry median Return-on-Tangible-Equity is 8.79. Zoom Communications' value of 18.05% is 105.5% above this benchmark. Historically, Zoom Communications' own Return-on-Tangible-Equity has ranged from 1.76 to 28.80 over the past decade. While the company's 10-year median is 12.47 vs. the industry median of 8.79, Zoom Communications has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 8.79, based on 2,474 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Zoom Communications's current Return-on-Tangible-Equity of 18.05% is 105.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Zoom Communications and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 8.79 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Zoom Communications's current Return-on-Tangible-Equity is 18.05%, which is 45% above median its own 10-year median of 12.47. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Zoom Communications stock overvalued right now?
Zoom Communications (XSWX:ZM) has a current Return-on-Tangible-Equity of 18.05%. The stock's GF Value™ is CHF63.80, compared to a current price of CHF68.47 — trading 7.3% above its estimated fair value. The current Return-on-Tangible-Equity is 18.05%, which is 45% above median its 10-year median of 12.47 and 105.5% above the Software industry median of 8.79. Zoom Communications' overall GF Score™ is 85/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Zoom Communications (XSWX:ZM), the current Return-on-Tangible-Equity is 18.05% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Zoom Communications (XSWX:ZM) Overvalued in 2026?
Based on GuruFocus' analysis, Zoom Communications stock appears to be overvalued.
The current stock price of CHF68.47 is trading 7.3% above its estimated GF Value™ of CHF63.80.
Key valuation signals for XSWX:ZM:
Return-on-Tangible-Equity: 18.05% (45% above median its 10-year median of 12.47)
GF Value™: CHF63.80 vs. price of CHF68.47 (7.3% above fair value)
Industry Position: 105.5% above the Software median (#738 of 2474)
No single metric tells the full story. See the XSWX:ZM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Zoom Communications provides a video-first communications platform that connects people through frictionless video, voice, chat, and content sharing. The company's cloud-native platform enables video experiences and connects users across various devices and locations in a single meeting. Zoom has launched a variety of communications-related solutions, including Zoom Phone and Zoom Contact Center. The firm was founded in 2011 and serves companies of all sizes from all industries around the world.
85GF Score
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