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Zoom (ZM) saw explosive adoption during the pandemic, followed by a sharp reset as growth normalized and investor attention shifted.
Since then, the business has stabilized. Revenue has held steady, profitability has remained strong, and free cash flow has stayed positive. Zoom continues to see consistent usage across enterprise, education, healthcare, and government customers. Over the same period, the stock spent nearly two years trading sideways as a base formed.
Today, Zoom looks like a mispriced large-cap software company with durable cash flow, a strong balance sheet, and a chart beginning to reflect that stability. This is the type of long-term setup I look for heading into 2026.
The Narrative
The post-pandemic focus has shifted to whether Zoom can remain relevant in a more competitive, slower-growth environment.
So far, results have been supportive.
Hybrid work has proven durable. Education and healthcare continue to rely on remote communication. Global teams still depend on video for sales, training, collaboration, and large-scale events.
While Microsoft Teams and Google Meet benefit from bundling, Zoom continues to differentiate on reliability, ease of use, and product focus. For many organizations, it remains the default option when meeting quality matters.
Zoom’s transition hasn’t been about regaining hyper-growth. It’s been about stabilizing usage, improving efficiency, and expanding into adjacent products like Phone and Contact Center.
That shift doesn’t show up in headlines, but it does show up in the financials.
The Numbers
Zoom is no longer a hyper-growth company, but it’s now a mature software platform with steady revenue and strong profitability. That shift is precisely why the stock is starting to matter again.
As of the most recent fiscal year:
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Annual revenue of roughly $4.5 billion
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Operating margins in the low-to-mid 30% range
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Consistent free cash flow generation
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Approximately $6 billion in cash and investments
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No long-term debt
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Ongoing share repurchase program
Enterprise customers continue to account for the majority of revenue, with Zoom maintaining strong retention among large organizations. While top-line growth has slowed, margins have improved as expenses have been brought under control.
The market has continued to price Zoom as if revenue erosion is inevitable. Instead, the financials show a business that has reached a stable operating base with improving efficiency.
Software companies don’t need rapid growth to rerate. They need predictability, cash flow, and operating discipline. Zoom increasingly checks those boxes.
The Chart
Zoom’s chart is one of the cleanest long-base reversals in tech right now.
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Multi-year downtrend ended
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Two-year sideways base built
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Higher lows forming
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Monthly RSI rising from low levels
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First multi-month strength since 2020
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Clear breakout zone at 103–105
Above that level, the next major supply zone is roughly 160.
This setup is comparable to the prior pick in this series, Rivian (RIVN), which has already broken out since that piece was published.`
What Drives the Upside
1. Multiple expansion
Zoom trades at a compressed valuation because investors still think the platform is shrinking. Once revenue shows stability with improving margins, the market will normalize the multiple.
2. AI Companion and Contact Center
Zoom’s AI layer is underrated.
Meeting summaries, follow-ups, searchable transcripts, and automated workflows actually matter for enterprise adoption. Zoom Contact Center is a real growth driver with a large addressable market.
3. Zoom Phone
One of the fastest-growing enterprise cloud phone systems worldwide. Sticky revenue with strong margins.
4. Cash and buybacks
Zoom has the balance sheet flexibility to support earnings per share even in a slow-growth environment.
This is a mature software company with optionality, not a declining one.
How I See 2026
Zoom is a stock that can rerate without needing explosive revenue growth. It only needs:
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Stable fundamentals
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Modest top-line improvement
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Clear AI and enterprise traction
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A technical breakout above the base
That combination supports a steady climb through a strong move into 2026.
Price framework
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Base case: 120–140
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Bull case: 160–200
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Extreme bull: 220+ if Contact Center and AI workflows become material contributors
The downside is already defined by a multi-year bottom. The upside is open if sentiment shifts and institutions rotate back in.
Why the Market Is Wrong
Zoom became a meme in reverse. Investors decided it was a pandemic anomaly. That belief got priced in and stayed there even as the financial results told a different story.
Zoom is not declining.
It’s a stable, profitable, widely adopted enterprise communication platform with new product layers and a large customer base.
The narrative is false, but the stock still reflects the outdated story.
That is where opportunities show up.
Final Take
Zoom isn’t trying to be the hyper-growth story it once was. It’s becoming a durable infrastructure layer for global communication. The market priced the stock like it was structurally broken, but the business never broke.
For 2026, Zoom has one of the cleanest risk-reward profiles in tech.
While I don’t expect this to be the rocket ship stock it was during 2020 - 2021, at this valuation I believe it can be a strong, compounding out-performer for years to come.
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