Zoom Video Communications Stock Might Be Down, but Here Are 222 Million Reasons It's Not Out
Zoom Video Communications (NASDAQ: ZM) stock has been in a freefall. Shares of the video conferencing giant have plunged 75% over the past year. Investors fled this pandemic darling as more people returned to the office and started meeting in person again.
This week, the stock took another hit after Zoom reported disappointing second-quarter results and cut its full-year forecast. However, while Zoom has hit some growth headwinds, it's generating a lot of cash. It produced $222.1 million of adjusted free cash flow in the second quarter. That free cash flow gives the company a huge advantage.
A first glance, Zoom's financial results were a bit underwhelming. While it does stand out among growth tech stocks because it's profitable and generates free cash flow, both numbers fell sharply in the second quarter. Even though revenue rose 8% to nearly $1.1 billion, GAAP net income tumbled from $316.9 million, or $1.04 per share, in last year's second quarter to $45.7 million, or $0.15 per share. Meanwhile, adjusted free cash flow plunged more than 50% to $222.1 million.
Source Fool.com
