Today's video focuses on Zoom (ZM +2.19%) and Autodesk (ADSK +2.35%). These two companies have seen a substantial decline in stock prices after reporting earnings. The fundamentals have not changed much for both companies, so could the drop in stock prices be a buying opportunity for investors? Here are some highlights from the video.
- Zoom announced its earnings on Aug. 30, and reported over 54% year-over-year (YoY) revenue growth. An increased number of customers with over $1 million in recurring revenue and the substantial acceleration of its Zoom Phone products drove the YoY growth. Even though YoY revenue growth was strong, quarter over quarter Zoom only saw roughly 7% growth, which might have some investors worried about future growth.
- Autodesk software is a leader in 3D modeling, and it is used in numerous markets like architecture, engineering, construction, manufacturing, and even media products like video games and animations. Autodesk reported double-digit percentage YoY growth in all of its product segments and in all geographic regions it hits.
- Zoom and Autodesk both have strong margins, which allows the companies to maintain strong balance sheets. Zoom has free cash flow margins of roughly 46% when looking at its trailing 12 months, and Autodesk has free cash flow margins of roughly 36% during the same time frame.
Click the video below for my full thoughts and analysis.
*Stock prices used were the closing prices of Sept. 3, 2021. The video was published on Sept. 6, 2021.
