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Why Zoom Communications Stock Zoomed Today

At just 12x this year’s free cash flow, Zoom Communications stock could be an incredible buy.

Pandemic communications star Zoom Communications (ZM 9.98%) stock, um (I’m trying not to say “zoomed”), moved ahead quickly Friday morning, rising 8% through 9:50 a.m. ET after beating soundly on its fiscal Q2 2026 earnings report last night.

Analysts forecast Zoom would earn $1.38 per share, adjusted for one-time items, on sales of $1.2 billion. Zoom earned $1.53 instead, and sales were a bit ahead of $1.2 billion.

1 green arrow going up.

Image source: Getty Images.

Zoom Q2 earnings

The report wasn’t quite as good as that makes it sound. Sales grew less than 5% year over year, and Zoom’s earnings as calculated according to generally accepted accounting principles (GAAP) weren’t quite as robust as the “adjusted” figure. GAAP profits were actually only $1.16 per share.

Still — and here I’m going to say it — those earnings zoomed 66% higher in comparison to last year’s Q2.

(For what it’s worth, the rise in adjusted earnings was only 10%).

Is Zoom stock a buy?

Commenting on the results, CEO Eric Yuan said “Zoom is at the forefront [of how] AI is transforming the way we work together,” essentially arguing that Zoom is an artificial intelligence stock — and the numbers back him up.

Zoom generated an incredible $508 million in Q2 free cash flow (FCF), up 39% year over year, and the company’s generated nearly $1 billion ($971.3 million, to be precise) in FCF so far this year. If Zoom can keep going at that rate, the company could conceivably rack up nearly $2 billion in cash profits this year, and at a market cap of only $24 billion, this would value the stock at barely 12 times FCF.

Whether Zoom’s growing at 66%, 39%, or even only 10%, that probably makes it a great growth stock buy.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zoom Communications. The Motley Fool has a disclosure policy.

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Clippers, Chris Paul reunite as point guard gears up for 21st season

The Clippers went from “strongly, strongly considering” bringing Chris Paul back to the franchise to actually agreeing to a deal with the point guard on Monday, according to people familiar with the situation but not authorized to speak publicly.

Lawrence Frank, the Clippers’ president of basketball operations, told the media Saturday in a Zoom that Paul “obviously possesses some of the qualities we just referenced” and that led to the two sides agreeing to a veteran’s minimum deal of about $3.6 million.

Paul played joined the Clippers for the 2011-12 season and was with the team until 2017 as he teamed up with Blake Griffin and DeAndre Jordan to form the core of the “Lob City” teams.

“What I’d say about Chris is he’s a great player,” Frank said during that Zoom meeting. “He’s a great Clipper.”

In what is likely his final season in the NBA, Paul will be entering his 21st campaign and will do so in Los Angeles, where his family lives.

Paul, 40, played in all 82 games last season with the San Antonio Spurs. He averaged 28.0 minutes per game, 8.8 points, 3.6 rebounds, 7.4 assists and shot 42.7% from the field.

Over the course of his career, Paul averaged 17.0 points, 9.2 assists and shot 47% from the field and 37% from three-point range.

Paul, a 12-time NBA All-Star, was a teammate with James Harden during the 2017-18 season with the Houston Rockets.

With the addition of Paul, the Clippers now have five veteran guards. They signed Bradley Beal to a two-year, $11-million deal and they also have Harden, Kris Dunn and Bogdan Bogdanonic.

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Amid ICE raids, the Chicxs Rockerxs summer camp protects community

Every year, nonprofit organization Chicxs Rockerxs (pronounced cheek-ex roh-kerr-ex) hosts a week-long summer camp in Southeast Los Angeles for girls and gender nonconforming youth to unleash their inner rock stars.

At the camp, which took place from June 30 to July 4 this year, students learn new instruments, attend creative workshops, and perform original songs in bands with their fellow campers. Students ages 8 to 17 qualify for enrollment.

Yet two weeks before camp this summer, amid the citywide uptick in raids by Immigration and Customs Enforcement, organizers heard some students were staying home in fear.

“As we were planning and getting ready for camp in person, that’s sort of when the raids started happening in Southeast L.A., and we saw how intensified they were in the area and how violent [they were] and just really damaging to the community,” said organizer Audrey Silvestre.

To safeguard campers and their families from ICE raids in the region, Chicxs Rockerxs canceled the in-person camp — but not entirely.

Organizers quickly moved the program online. Staffers offered to drop off musical instruments, gift cards for food, and camp supplies to families who were not comfortable going out during the raids. They also made a formal announcement on Instagram, informing supporters about the crucial format change.

“We want to reaffirm that CRSELA stands in solidarity with our Black and Brown immigrant communities. As an organization, we formed in response to the firsthand challenges faced by girls and LGBTQ+ youth in Southeast LA, a predominantly Latinx/e immigrant region,” the post read in part.

“Thank you for thinking of the babies!!!” one person commented on the camp’s post.

“Your SELA community supports you!” another person wrote.

“It didn’t feel safe to be asking our communities to take the risk to leave their homes if they didn’t feel safe to do so,” Silvestre said.

Chicxs Rockerxs previously went virtual during the COVID-19 pandemic and facilitated their music camp by having students connect through Zoom to create bands, learn songwriting skills, and come up with an end product they could record together in the video sessions. According to Star, an organizer who asked that their full name not be disclosed for privacy reasons, the virtual model they developed for the pandemic was restructured for this year’s camp, and many changes were made to enhance the experience.

“We wanted them just to have an opportunity to have a safe space to create and to express themselves, and it didn’t necessarily have to result in a song at the end of the week,” Star said. “It was just opportunities to be creative.”

Students still learned new instruments this year, as staffers were able to drop off keyboards, guitars, bass guitars, drum pads and karaoke microphones to campers for daily lessons. Besides music courses, students also participated in smaller breakout rooms called “jam rooms,” which included different themes and creative activities. For example, some jam rooms consisted of karaoke, while others focused on making TikToks and interviewing one another.

“The idea behind these rooms was to keep it fun, because it’s Zoom and it’s not the most exciting for many kiddos who went to school on Zoom,” said Silvestre. “It’s not the most enjoyable way to experience camp, but it’s for them to have fun, bond with their bandmates and just be in community with each other.”

While campers all participated online from home, some staffers operated in person at their campus to stream lunchtime performances and daily assemblies. The organizers created a “DIY television studio,” which they described as similar to public access cable, allowing them to toggle between different cameras from their set to make sessions dynamic and improve the virtual experience for students.

Students like 17-year-old Naima Ramirez, who attended camp for the past four years, said she appreciated what Chicxs Rockerxs did for her and fellow campers.

“I think it was very thoughtful and kind of them to forget all of the scheduling that they had originally done for in-person camp and scramble into doing everything on Zoom,” Ramirez said.

Ramirez said she was initially disappointed to hear that camp was moving online but believed Chicxs Rockerxs did the right thing because of the current environment in Southeast L.A.

“I was bummed because it’s my last year and I was really looking forward to being in person,” Ramirez said. “But I also understood why we had to go online.”

For organizers at Chicxs Rockerxs, the safety and well-being of campers and their families is their top concern. Even though camp took a different approach this year, they said they’re always willing to help campers beyond the creative services they provide.

“One of the things CRSELA prides itself in is that this is meant to be a safe space,” Star said. “I’m really proud that we [were] able to create a safe space in a different way for [camp this year]. It’s a safety precaution for our community, and I think that’s more important at this time.”

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