Discussing our Zoom Valuation with Will Summerlin and Andrew Kim

Please note: as of 3/31/22, ARK’s clients own greater than 1% of the shares outstanding of Zoom Video Communications.

Read our full valuation article here.

According to ARK’s open-source research and model, Zoom’s share price could approach $1,500, compounding at a 76 percent annual growth rate in 2026. In today’s episode, Will Summerlin and Andrew Kim talk through their thesis for Zoom, as well as their open-source Zoom model that’s available on GitHub. They cover the type of top-down research that we do at ARK, as well as some of the research that they have done for Zoom. Tuning in, you’ll hear their bottoms-up analysis of Zoom as Will and Andrew dig into the modes that they believe Zoom has, as well as the competitive dynamics they think are going to play out in the communication software space. They also talk through their model and key drivers and, finally, close out with the overall AI opportunity that ARK sees playing out over the next decade and how they believe Zoom can capture some of that opportunity. For all this and more, make sure not to miss today’s conversation!

Key Points on this Episode:

• The type of top-down research we do at ARK.
• Understanding the opportunity for communication software in the context of hybrid work.
• Why we believe Zoom is in a unique position to benefit from the trend towards AI productivity.
• Our bottoms-up analysis of Zoom’s people, management, and culture; product leadership; execution; and barriers to entry.
• Zoom’s infrastructure, enterprise readiness, AI data advantages, and third-party ecosystem.
• The four drivers that we attribute the most important to in our Zoom model.
• Unpacking the manual and Monte Carlo models of our Zoom Valuation Model on GitHub.
• Our bull and base forecasts for Zoom’s top-line growth.
• How we see Zoom capturing AI opportunity thanks to declining deep learning training costs, among other factors.
• The interesting role AI could play in making Zoom meetings more productive.
• We encourage you to download the model, put in your own assumptions, play around with it, and provide us with your feedback on Twitter!

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The forecasted performance and price estimates herein are subject to revision by ARK and provided solely as a guide to current expectations. There can be no expectation that the specific security will achieve such performance or that there will be a return of capital. Past performance is not indicative of future results.

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The recipient is urged to use extreme caution when considering the forecasted performance, as it is inherently subjective and reflects ARK’s inherent bias toward higher expected returns. Any higher returns should be viewed as a measure of the relative risk of such investments, with higher forecasted performance generally reflecting greater risk. There is no guarantee that any results will align with the forecasted performance, and they might not be predictive. Some or all results may be substantially lower than projected results and, as with any investment, it is possible that you could lose money.

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