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Unity Software Inc. (U) vs Zoom Communications, Inc. (ZM)

Unity Software Inc. and Zoom Communications, Inc. are both Software Application companies. Zoom Communications, Inc. is the larger, with a market value of $25.9B against $21.5B — 1.2× the size. Unity Software Inc. has negative trailing earnings, so its P/E is not meaningful; Zoom Communications, Inc. trades at 8.1×. Unity Software Inc. grew revenue faster over the last twelve months: 20.9% against 5.04%. Zoom Communications, Inc. has the higher net margin (65.2% vs −15.6%) and the higher return on invested capital (18.3% vs −8.55%). Across the 21 metrics below, Zoom Communications, Inc. leads on 18 and Unity Software Inc. on 3.

Valuation

Metric U ZM Software Application median
P/E n/m 8.07 25.90
P/S 11.05 5.22 3.04
P/B 7.40 2.31 2.60
Price to free cash flow 40.73 13.55 17.17
EV/EBITDA 591.56 12.02 15.48
EV/Sales 10.86 3.77 2.89
Earnings yield (1.63%) 12.40% 0.00%
Free cash flow yield 2.45% 7.38% 1.98%

Profitability

Metric U ZM Software Application median
Gross margin 67.65% 77.30% 66.89%
Operating margin (17.87%) 23.73% 0.00%
Net margin (15.59%) 65.19% 0.00%
Free cash flow margin 27.84% 38.55% 5.77%
Return on equity (10.52%) 32.14% 0.00%
Return on assets (4.95%) 26.43% 0.00%
Return on invested capital (8.55%) 18.27% 0.00%

Growth

Metric U ZM Software Application median
Revenue growth (TTM) 20.86% 5.04% 12.27%
EPS growth (last fiscal year) 42.86% 92.52% 32.11%
Revenue growth, 5-year CAGR 19.08% 12.92% 14.34%
Net income growth, 5-year CAGR 0.00% 23.12% 0.00%

Health

Metric U ZM Software Application median
Debt to equity 0.69 0.00 0.02
Current ratio 2.16 3.83 1.53
Net debt to EBITDA (9.91) (5.08) 0.09

Dividend

Metric U ZM Software Application median
Dividend yield — — 1.10%
Payout ratio — — 0.28

Size

Metric U ZM Software Application median
Market cap 21.48b 25.92b 487.58m

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