8/20/24 - $zm - Long print at $59, r/r good
Updated
8/20/24 :: VROCKSTAR :: 
ZM
Long print at $59, r/r good
- report tmr/ wednesday. using today's down day to take advantage.
- all in... not my favorite tech stock, management or product but let's just think logically.
- net cash by a ton (40% of the enterprise value)
- cash generative (we can sort out how to grade stock options which i think they're doing wrong but again high level strokes here)
- net cash adj. PE on stock price of 7x, fcf yield either 5% (if you take out stock comp) or 10% if you leave it in. good.
- products are becoming more ai-forward. they're inching. the experience is still best in class even though it's a shame there's been very very (and very) little innovation in video calling. it's still better than teams and google has... well... idk... meet is an awful product.
- so all in. the options chain tells me ppl r only willing to rent upside beyond 65 and require a hefty sum to forego 60-63 territory. puts are cheap too which is telling.
- i'd guess the market is baking in a 5-10% move up. downside should be somewhat bid b/c of the reasons above. i'd also probably be a dip buyer.
so i'm a small 50 bps position into the print. not wed to it. but the r/r looks favorable all else equal.
what do u think?
V
ZMLong print at $59, r/r good
- report tmr/ wednesday. using today's down day to take advantage.
- all in... not my favorite tech stock, management or product but let's just think logically.
- net cash by a ton (40% of the enterprise value)
- cash generative (we can sort out how to grade stock options which i think they're doing wrong but again high level strokes here)
- net cash adj. PE on stock price of 7x, fcf yield either 5% (if you take out stock comp) or 10% if you leave it in. good.
- products are becoming more ai-forward. they're inching. the experience is still best in class even though it's a shame there's been very very (and very) little innovation in video calling. it's still better than teams and google has... well... idk... meet is an awful product.
- so all in. the options chain tells me ppl r only willing to rent upside beyond 65 and require a hefty sum to forego 60-63 territory. puts are cheap too which is telling.
- i'd guess the market is baking in a 5-10% move up. downside should be somewhat bid b/c of the reasons above. i'd also probably be a dip buyer.
so i'm a small 50 bps position into the print. not wed to it. but the r/r looks favorable all else equal.
what do u think?
V
Note
nice.
selling some weekly C's over 64 for a buck to lock in some upside without selling outright just here.
enjoy
V
PS - nice call out by my friend on having me take a look here.
Trade closed: target reached
stock now >$65
covered the calls.
sold the stock.
possibly more to go but i'm happy w/ the return. W is a W.
looking for the next earnings setup. lmk if you spot one and i'm happy to take a look.
have a good day friends
V
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