On May 24, 2023, Aparna Bawa, the Chief Operating Officer (COO) of Zoom Video Communications Inc (ZM, Financial), sold 7,000 shares of the company's stock. This recent transaction is part of a series of insider sales by Bawa, who has sold a total of 98,589 shares over the past year and purchased none.
Who is Aparna Bawa?
Aparna Bawa is the COO of Zoom Video Communications Inc, a leading provider of video-first unified communications solutions. Bawa joined the company in 2018 as the General Counsel and has since played a significant role in the company's growth and success. As COO, she is responsible for overseeing the company's operations, including legal, finance, and business development.
Zoom Video Communications Inc's Business Description
Zoom Video Communications Inc is a technology company that offers a comprehensive suite of video-first unified communications solutions. The company's platform combines video, voice, content sharing, and chat functionalities, enabling users to connect and collaborate seamlessly across various devices and locations. Zoom's solutions cater to businesses, educational institutions, and healthcare organizations, among others, providing a reliable and secure platform for communication and collaboration.
Insider Trends
The insider transaction history for Zoom Video Communications Inc reveals that there have been no insider buys over the past year. In contrast, there have been 38 insider sells during the same period. This trend suggests that insiders may be taking advantage of the company's strong performance and high stock price to cash in on their holdings.
Valuation
On the day of Aparna Bawa's recent sale, shares of Zoom Video Communications Inc were trading at $63.52 apiece, giving the company a market capitalization of $19,709.543 million. The stock's price-earnings ratio is 9,999.00, significantly higher than the industry median of 26.79 and the company's historical median price-earnings ratio. This high valuation may be a contributing factor to the recent insider selling activity.
With a current price of $63.52 and a GuruFocus Value of $267.48, Zoom Video Communications Inc has a price-to-GF-Value ratio of 0.24, indicating that the stock is significantly undervalued based on its GF Value. This discrepancy may present an attractive investment opportunity for those who believe in the company's long-term prospects.
The GF Value is an intrinsic value estimate developed by GuruFocus, calculated based on the following three factors:
- Historical multiples (price-earnings ratio, price-sales ratio, price-book ratio, and price-to-free cash flow) that the stock has traded at.
- A GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of business performance from Morningstar analysts.
In conclusion, the recent sale of 7,000 shares by Zoom Video Communications Inc's COO Aparna Bawa is part of a broader trend of insider selling at the company. Despite the high price-earnings ratio, the stock appears to be significantly undervalued based on its GF Value. Investors should carefully consider these factors and conduct further research before making any investment decisions.
