Zoom is quietly transitioning from a pandemic-era growth story into a high margin enterprise software platform. While investor sentiment has remains anchored to decelerating top-line growth, the company’s fundamentals tell a different story: improving margins, accelerating capital returns, and a growing portfolio of enterprise products that are steadily growing market share. As expectations remain compressed, Zoom is beginning to emerge from a multiyear base with improving momentum, creating an attractive risk-reward profile for investors willing to look beyond the “post-Covid” narrative. Trade timing & outlook Zoom appears to be completing a multiyear bottoming formation after spending nearly two years consolidating between $60 and $85. The recent breakout above the $86 resistance level marks a meaningful shift in market structure. ZM has decisively broken out above the $85–$86 level, which capped rallies throughout 2024. The stock has outperformed the S & P 500 by roughly 5% over the past month, suggesting improving institutional demand. From a technical perspective, the setup supports a move toward the $100 range, with a potential extension toward $120 should earnings confirm the breakout. Fundamentals: A cash-generating business Despite the market’s skepticism, Zoom’s fundamentals remain remarkably strong: Forward P/E: ~14.5x Net margin: ~33% Forward revenue growth: ~3.5% Balance sheet: Net cash position with over $7 billion in liquidity While revenue growth has slowed, profitability remains elite. Zoom is generating free cash flow at levels more commonly associated with mature software leaders, not companies priced for secular decline. The disconnect between valuation and financial quality has created a margin of safety rarely seen in large-cap software. Bull case: A quiet shift to profit Growth: Zoom is no longer chasing expansion but generating cashflow and returning capital via buybacks. Contact center as the hidden growth driver: Zoom Phone and Contact Center continue to gain double digit growth. These products carry higher switching costs and better economics, providing a credible path to growth re-acceleration. AI as a margin enhancer: Zoom’s “AI Companion” strategy is designed to enhance stickiness rather than chase headline revenue while premium tiers introduce optional upside without pressuring margins. Capital return flywheel: With over $8B in cash and a shrinking share count, aggressive buybacks amplify per-share earnings even in a low-growth environment. Options strategy: Defined-risk bullish exposure To express a potential reaccelerating of ZM growth, I prefer to go out to Feb and buy the $85/95 Call Vertical @ $3.49 Debit. This entails: Buy ZM Feb 20, 2026 $85 Call @ $4.43 Sell ZM Feb 20, 2026 $95 Call @ $0.94 Trade metrics: Maximum risk: $349 per contract if ZM is below $85 at expiration Maximum reward: $651per contract if ZM is above $95 at expiration Breakeven: $88.49 View this Trade on OptionsPlay for Updated Prices This structure benefits from continued upside while limiting capital at risk, aligning well with a thesis centered on steady multiple expansion rather than explosive growth. Summary Zoom’s hyper-growth story is long gone, but with strong cash generation, disciplined management and an increasingly diversified product suite, the company is quietly rebuilding investor confidence. As momentum turns higher and capital returns accelerate, ZM offers a compelling risk-reward profile for investors seeking quality, optionality, and downside protection in a late-cycle market environment. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
