Talk about going down to the ground. Zoom Video, the pandemic rocket ship, has been a modern blimp in stock sell-offs over the past 12 months. Its stock dropped 75% from the highest set in the fall of 2020 to Wednesday’s close of $ 140.33 as investors abandoned high -growth stocks. But Zoom fell too far.
In a rising interest rate environment, companies that are making a profit now are becoming more valuable, investors say, while fast -growing profits but for whom profits are a few years away are worth less. . And Zoom ranks there among the best in the dimensions of money generation. It is expected to report free cash flow — cash from operations, less capex — of about $ 1.5 billion for the year to January, according to S&P Global Market Intelligence. That’s about 38% of its expected revenue, a relatively high percentage compared to other software companies.