The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.
Good Sign:
Altman Z-score of 9.42 is strong.
Zoom Communications has a Altman Z-Score of 9.63, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.
The zones of discrimination were as such:
When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.
The historical rank and industry rank for Zoom Communications's Altman Z-Score or its related term are showing as below:
XSWX:ZM'
s Altman Z-Score Range Over the Past 10 Years
Min: 7.04 Med: 10.28 Max: 52.77
Current: 9.42
During the past 10 years, Zoom Communications's highest Altman Z-Score was 52.77. The lowest was 7.04. And the median was 10.28.
X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.
X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.
X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.
X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.
X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.
Altman Z-Score does not apply to financial companies.
Zoom Communications Altman Z-Score Related Terms
Zoom Communications Altman Z-Score Historical Data
* Premium members only.
The historical data trend for Zoom Communications's Altman Z-Score 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: Altman Z-Score Comparison
For the Software - Application subindustry, Zoom Communications's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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 Altman Z-Score vs Software Industry
For the Software industry and Technology sector, Zoom Communications's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where Zoom Communications's Altman Z-Score falls into.
Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
Zoom Communications's Altman Z-Score for today is calculated with this formula:
Z
=
1.2
*
X1
+
1.4
*
X2
+
3.3
*
X3
+
0.6
*
X4
+
1.0
*
X5
=
1.2
*
0.538
+
1.4
*
0.5036
+
3.3
*
0.2184
+
0.6
*
11.9155
+
1.0
*
0.4086
=
9.63
* 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. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.
Zoom Communications (XSWX:ZM) has a Altman Z-Score of 9.63 as of Jun. 27, 2026. The Altman Z-score measures a company's bankruptcy risk. View historical data on Zoom Communications and its competitors. This is near median its historical median of 10.28. Over the past decade, Zoom Communications' Altman Z-Score has ranged from 7.04 to 52.77. According to the industry distribution chart, Zoom Communications ranks #382 out of 2765 companies in the Software industry, placing it in the top 13.8%.
Is Zoom Communications' Altman Z-Score too high?
Zoom Communications' current Altman Z-Score of 9.63 is near median its 10-year median of 10.28. Over the past 10 years, this metric has ranged from a low of 7.04 to a high of 52.77. The Software industry median Altman Z-Score is 3.13. Zoom Communications' value of 9.63 is 207.7% above this industry median. Based on the distribution chart, Zoom Communications ranks #382 out of 2765 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Zoom Communications has a GF Score™ of 85/100, reflecting its overall financial health beyond just this single metric.
How does Zoom Communications' Altman Z-Score compare to FICO and TEAM?
According to the Software industry distribution chart, Zoom Communications ranks #382 out of 2765 companies for Altman Z-Score. This places Zoom Communications in the top 14% of its industry — outperforming the majority of peers. The industry median Altman Z-Score is 3.13. Zoom Communications' value of 9.63 is 207.7% above this benchmark. Historically, Zoom Communications' own Altman Z-Score has ranged from 7.04 to 52.77 over the past decade. While the company's 10-year median is 10.28 vs. the industry median of 3.13, 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 Altman Z-Score for a Software company?
The median Altman Z-Score among Software companies is 3.13, based on 2,765 companies in the industry. Companies in the top quartile (top 25%) have a Altman Z-Score significantly above this median, while those in the bottom quartile fall well below. However, Altman Z-Score should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Zoom Communications's current Altman Z-Score of 9.63 is 207.7% 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 Altman Z-Score mean?
A high Altman Z-Score can signal that a stock is expensive relative to its fundamentals. The Altman Z-score measures a company's bankruptcy risk. View historical data on Zoom Communications and its competitors. For the Software industry, the median Altman Z-Score is 3.13 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Zoom Communications's current Altman Z-Score is 9.63, which is near median its own 10-year median of 10.28. 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 Altman Z-Score of 9.63. 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 Altman Z-Score is 9.63, which is near median its 10-year median of 10.28 and 207.7% above the Software industry median of 3.13. 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 Altman Z-Score calculated?
Altman Z-Score is calculated from a company's financial statements. For Zoom Communications (XSWX:ZM), the current Altman Z-Score is 9.63 as of Jun. 27, 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:
Altman Z-Score: 9.63 (near median its 10-year median of 10.28)
GF Value™: CHF63.80 vs. price of CHF68.47 (7.3% above fair value)
Industry Position: 207.7% above the Software median (#382 of 2765)
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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