I am assigning Zoom Video Communications (NASDAQ: ZM) a negative risk/reward rating due to an elevated valuation in the face of rapidly decelerating revenue and cash flow growth, as well as initial signs of margin pressure. That being said, if Zoom can parlay its COVID-era success into sustainable growth in the enterprise communications market, the company could become an attractive investment opportunity. In this article I break down Zoom’s financial performance through the first half of 2022 to illuminate the business trends then review the company’s valuation and technical backdrop to formulate an investment strategy for the shares.
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