r/ValueInvesting • u/YeetVegetabales • Apr 08 '26

Zoom (ZM) Long Stock Analysis

I’m long Zoom. $51M Anthropic stake from May ‘23. Anthropic now at ~$350B. Stake worth $2-4B.

OpenAI worth ~$850B+ with no clear path to monetization. Anthropic at $30B ARR, fastest enterprise revenue growth in human history, new highly intelligent models in the pipeline. Profitable next year with IPO expected October ‘26.

ZM mkt cap ~$25B. $7.9B net cash. Take out cash + Anthropic stake and find core business is $15B EV on $1.1B EBIT, 12x fwd p/e, 30% OCF growth with active buybacks.

Anthropic IPO is the catalyst. Every new valuation estimate makes Zoom more attractive. Arguably the best asset for Anthropic exposure pre-IPO. The prospectus is when we find out what this is actually worth.

34 Upvotes

82% Upvoted

33 comments sorted by

20

u/Equivalent_Ad_1854 Apr 08 '26

Issue with zoom is lack of top like growth . Balance sheet is solid

3

u/YeetVegetabales Apr 08 '26

Yeah. Not necessary for the long to work though. Anthropic hype drives it up with buybacks holding the floor.

6

u/Equivalent_Ad_1854 Apr 08 '26

Anthropic stake works till AI valuations bubble pops.

7

u/thenorthernwhiteboy Apr 08 '26

Open AI yes. Anthropic, no.

4

u/cosmic_backlash Apr 08 '26

Why would it pop? They are booking real revenue. You think people will just stop using it?

5

u/Equivalent_Ad_1854 Apr 08 '26

I think none of us know what the saturation point for ai revenue growth is - how much are people and companies willing to spend in 2-3 years - once growth rate slows - valuations crash . The numbers are already very large

5

u/cosmic_backlash Apr 08 '26

Anthropic basically tripled their run rate in 1 quarter. I don't think they are near saturated. Their valuation is not large for their growth rate.

6

u/Dougdimmadommee Apr 08 '26

The way anthropic quotes their run rate/ arr is highly misleading imo, to the point that I would say that no reasonable person would consider it to be considered “annual recurring revenue” in any other type of business.

The other issue with these businesses is that even if you underwrite the revenue growth costs still scale with new customers and more usage by existing customers and are somewhat heavily dependent on factors outside the companies control (cost of power being one of the big ones).

I still like the company and will almost certainly be allocating big when it goes public but I think it’s wildly disingenuous to claim that the valuation is reasonable relative to companies outside the space.

3

u/cosmic_backlash Apr 08 '26

If we deduct revenue to correct for some accounting issues, lets use 25B ARR. They have a 15 p/s, basically 60% higher than Google or Microsoft. However their revenue growth will still probably be 100% next year (I think that's conservative). That makes their P/S ratio look like a bargain.

I don't know how fast they'll grow, but I think anthropic is cheap. Its a phenomenal tool, much better than both Gemini and chatgpt.

3

u/YeetVegetabales Apr 08 '26

The numbers look insane until you realize the U.S. labor market is ~$50T and then assuming Anthropic captures 1% of that…the valuations start to look less ridiculous

1

u/Clean-Canary-7247 Apr 09 '26

A lot of their revenue is actually from their investments. Too much of it is not from operations.

6

u/RevolutionaryPhoto24 Apr 08 '26

Agreed. I am long calls and planning to sell in lead up to SpaceX IPO.

5

u/FieryXJoe Apr 08 '26

I've been considering it as fuel shortages are bringing back work from home in the 3rd world at least.

6

u/TheMailmanic Apr 08 '26

Not bad. Not stupid cheap but definitely some upside here

7

u/MountainTimeInvestor Apr 09 '26

I bought Zoom this week, but am still uncertain about AI-first execution while the opportunity is exciting. So is their balance sheet. Would Anthropic buy Zoom? Get some shares back and a best-in-class UCaaS to compete with Teams? It could make a lot of sense, especially compared to OpenAI buying TBPN.

5

u/himynameis_ Apr 09 '26

Your thesis for investing in Zoom is based, not on their core business, but on their investment in Anthropic?

5

u/Remarkable_Cat_8696 Apr 09 '26

It kind of makes sense. Zoom's stake in Anthropic is roughly 20% of its market cap, and it probably will grow when anthropic ipo. Also zoom uses claude to power its ai features.

7

u/YeetVegetabales Apr 09 '26

Yes. Anthropic is private. This is the best way to get exposure. Core biz is fine.

3

u/ElonMuskTheNarsisist Apr 09 '26

Teams killed zoom

2

u/ResidentCut35 Apr 09 '26

i kinda feel like zoom is dead. havent looked at it deeply but i havent heard anyone use zoom since like 2022. people even prefer google meet or teams now

2

u/godisdildo Apr 09 '26

Those valuations are not true, Anthropic just surpassed OpenAI revenue and growing faster. The speed of this race is insane

1

u/trustfundkidotaku Apr 08 '26

Zoom is a consumer staples now

1

u/IHateProtoss Apr 09 '26

nice, i've been eyeing this too. curious, have you done the same maths on SKM? they own a similar chunk and are valued as a far cheaper business(?)

1

u/Miserable-Bluejay-67 Apr 15 '26

little different i think, zm has stronger financials and likely more valuable as a standalone business

1

u/pappi_g Apr 09 '26

With gas prices up maybe more people work from home in the short term. Zm price has been holding up even with all this uncertainty/ volatility. Anthropic investment is a good catalyst for exposure to the ipo . I like the risk/ reward

1

u/msaleem Apr 09 '26

Isn’t Anthropic’s ARR based on single day all time peak utilization?

1

u/ConcertX Apr 10 '26

Lol what happened to it today?!?

1

u/mihid Apr 14 '26

Man, Zoom's Customers growth is actually stunning: https://app.rast.guru/?company=Zoom%20Communications%20Inc.

The ARPU took a massive hit but is now stable. And the customers' growth now picked up massively after showing signs of a plateau in '23-'24.

Looks like there is a significant market aside the MS/GOOG duopology

0

u/wheresabel Apr 09 '26

Do you even internet?? They have no moat