The MACD also neared recent highs before softening as well. Its Bollinger Percent B approached 1o0, then headed down. ZM reached overbought readings on a 9-day RSI basis before turning lower. The technicals are finally flashing red for Zoom stock. We all know the usual outcome when you go against the likes of Facebook, Microsoft and Alphabet. This threat of increased competition by industry giants at reduced pricing will undoubtedly serve to slow growth and lessen margins for Zoom. Sanders goes on to note that Google will be giving away the newly launched Meet video platform for free. He notes that all three competitors have seen upticks in adoption of their platforms over the past several weeks. InvestorPlace contributor Patrick Sanders took a deep dive on the competition in his May 4 analysis. This is especially true given the increased competition by heavyweights such as Facebook (NASDAQ: FB), Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG, NASDAQ: GOOGL). It will be difficult to justify these ridiculous multiples once the corona-fueled growth slows and the lockdown lightens. To say ZM stock is priced for perfection is an understatement. The stock is trading at a 400 P/E on a forward basis with a PEG ratio of nearly 12. Other valuation metrics, such as price-to-earnings and price-to-book, are at similar nosebleed extremes.
The current price-to-sales ratio is over 68 and at the highest level of the past year. Zoom’s stock is certainly not cheap from a fundamental basis.
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