Is Zoom Stock a Bargain or a Value Trap?
Zoom Video Communications' (NASDAQ: ZM) stock is trading at less than $150 today and has a market capitalization of $22 billion. It therefore may be difficult for investors to wrap their heads around the fact that there was a point just a few years ago when the stock's market capitalization was greater than $150 billion and its stock price was closing in on $600.
This begs the question: With shares down so far from their high, is it finally time for investors to buy the tech stock? Or is this a classic value trap?
One reason to be bullish on Zoom stock is its lucrative business model. For instance, the company generated free cash flow of $336 million in Q2 alone -- and that was on revenue of $1.14 billion. This means the company's free cash flow for its second quarter equaled 30.6% of revenue.
Source Fool.com
