In addition to this strong cash position, Zoom has a strong balance sheet with no long-term debt. Shares are even cheaper than they look at first glance when you account for the fact that the company has $18.51 of cash per share on its balance sheet, meaning that nearly a quarter of the company's market value is in cash. While this isn't exactly cheap from a traditional value investing perspective, it isn't egregiously expensive and is far below the levels it traded at during the pandemic.

value stock?!Īfter the sell-off, Zoom now trades at a price-to-earnings multiple of 24. But here's why the market looks like it is too bearish on Zoom. The company reported single-digit revenue growth for the first time since 2019 and missed consensus analyst estimates for the first time since going public. Shares plunged 15% after the company reported slowing growth and lowered its guidance during its second-quarter earnings, and the stock is now down 77% from its 52-week high of $357.93. But just like the market got overly exuberant about Zoom then, the pendulum seems to have swung too far in the other direction and the market now seems too bearish on Zoom.

In hindsight, shares of Zoom got way too frothy and the pendulum clearly swung too far in the bullish direction for many of these work-from-home stocks during that unprecedented time. At one point, Zoom had a bigger market cap than Exxon Mobil, one of the world's largest energy companies, and a higher market valuation than the world's seven largest airlines put together.

Zoom is perhaps the poster child for the 'work from home' stocks that surged to unprecedented heights during the height of the COVID-19 pandemic. I never expected to say this, but shares of Zoom Video Communications ( ZM -3.26%) are starting to look like a good value, if not a downright bargain.

Zoom stock target