 Zulu just had another crash But Warren Buffett once said Be fearful when other people are greedy And be greedy when other people are fearful So with this massive sell-off in Zoom Let's zoom into this talk and take a look at Whether is this indeed a good time to be greedy? Kylie, this is Chloe and welcome back to my channel The all-in-one place for you to learn about stocks, investing, as well as options If it's the first time of you coming to my channel Remember to hit the subscribe button as well as the notification bell So that you will not miss out any of my future investment insights And early thumbs up is also appreciated Because it will tell you the algorithm that you find this video helpful And it will actually help to push out to more people To inspire them to start investing safely With the help of pandemic and everybody working from home Zoom stopped right so tremendously back in 2020 However, with the COVID situation eases Many investors are getting scatish about the future growth potential And that caused the stock price to plummet 80% from its all-time high Before you look into Zoom, let's take a look at the business model first And see whether it even makes sense to invest in a business like that Founded in 2011, Zoom is a cloud-native platform That enables face-to-face video communications It offers a premium model that caters to individuals As well as companies of all sizes The reason why Zoom can take off so easily during the pandemic Is because it's user-friendliness Well, unlike most of the communication software out there You don't have to create any single account You don't have to download any single software As long as you have the Zoom link You just click on it and turn it on You are inside the Zoom meeting And this easy-to-use function helps Zoom to spread like a wildfire During the pandemic time And once the customer hop onto Zoom Well, there are many places for Zoom to upsell its paid services Depending on the customer's needs The customer can choose to upgrade from its current free plan To a paid plan or even start using other Zoom services Such as Zoom Webinar or Zoom Phone Apart from reaching out to the mass market directly via online Zoom also adopts a hybrid strategy that reach out to enterprises Which later on I'm going to talk about How fast is Zoom growing its enterprise customers as well And here are the five reasons why do I think Zoom is actually attractive right now Reason number one It has very solid growth Even though the lockdown is loosening Well, its customer's retention is still really high More customers are using Zoom over the years And they are also spending more on Zoom At the end of financial year 2022 Zoom had more than 2,700 customers Generating over $100,000 in terms of annual revenue Up from 66% compared to the previous year Its enterprise customer also grew 35% year on year To close to 190,000 customers right now And it had a net dollar expansion rate of 130% Wait, but what is net dollar expansion rate? Let's invite Teacher Chloe to come here to explain Hi my fellow students, this is Teacher Chloe A net dollar expansion rate measures the revenue growth From its existing customer cohort So to simply put A net dollar expansion rate of 130% Means that its current enterprise customers Not only continue to subscribe to Zoom services They further spend additional 30% Upgrading or using other paid services offered by Zoom Hope you learned something today And I'll see you in the next class So the overall revenue hit 4 billion Which is a 50% year on year growth And when you are coming off 369% revenue growth The prior year Managing an additional 55% growth It's really impressive Reason number two Run under strong economic mode Zoom has a certain degree of switching costs Especially at the enterprise level For example, Zoom recently announced a new partnership To integrate docuSign technology into its platform To allow its users to review on the documents In the Zoom meeting So back-end integrations like this Will definitely help to increase the stickiness of Zoom Because it's so convenient to use as an enterprise level And as more applications and solutions Are tied to the core function of the business This makes software like Zoom even harder to be switched Reason number three Strong balance sheet Apart from having a stunning growth The company also has a 5.4 billion War chest of cash and short-term investments Against zero long-term debt What does that mean as being an innovative company like Zoom They have all the resources and cash that they need To develop new products And make Zoom the ecosystem even stronger Number four Expanding market share The growing integration of technologies Such as AI, IoT, machine learning In video-conferencing products and solutions Is propelling this industry to grow even more Back in 2019 Zoom-sized unified communication and collaboration market To be $34 billion But now it sees its expansion to $91 billion by 2025 So the demand for Zoom is just simply enormous Last but not least It is the great management Eric Yuan is the founder and CEO of Zoom He is super experienced in this field In fact, he is the pioneer engineer in WebEx Which used to be a leader in this web conference WebEx was eventually bought over by Cisco And according to the research I found Back then because it's already such a dominating market leader The management was reluctant to improve And that's what propelled Eric Yuan to quit his job After 14 years and start his own company Called Zoom right now And as you can see under his leadership How much Zoom has grown over the years And I truly believe that under a visionary leader like Kim Zoom will continue to grow in the next 10 years So now let's zoom into Zoom And take a look at its valuation As you can see the valuation of Zoom right now Is really pretty decent Because the P ratio right now has actually dropped to 22 times Right? This is way lower as compared to what it used to be So you can see that Zoom is actually a profit making company With growing EPS It's free cash flow It's also growing tremendously And it also has positive operating cash flow Even its growth rate as compared to the current P ratio In my opinion, Zoom is really at a fair value In fact, right now the stock price has dropped below the pre-COVID level Which makes it super attractive to buy Hey class I just want to remind you that this is not a buying or selling recommendation Because you need to do your own homework Make sure you do so If not, teacher Chloe will come with a cane The pandemic has completely changed how we work And how we communicate during these days The hybrid working environment is here to stay Given that how convenient, efficient and cost saving that it can be When meetings and communications are conducted online Zoom has benefited tremendously from its shift And I believe with this competitive advantage that it has built up Its high retention subscription rate As well as customers willing to spend more on its platform Zoom is definitely here to stay And will continue to grow more in the next 5 to 10 years So Zoom is definitely a buy for me And in fact, I recently added more positions To captivate on this market opportunity So Zoom a buy for you? Let me know in the comments below And if you want to use options to accelerate your return On great businesses like Zoom Then do join us in our upcoming Options Foundation class Where we are going to share with you Three powerful options strategy To profit regardless of the market conditions All you need to do is to click on the link around this video And register for your free spot And if you find this video helpful Remember to hit the like button and share to your friends So that more people will be inspired to start investing safely Last but not least Make sure to do join my Telegram channel Because I constantly update a lot of investment insights over there With that, have a beautiful day And I will see you in my next video Matane! Grow from the xx this ajija So to simply put A net dollar expansion rate Good job mother! Time to go for my next class