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 $26.5B against $18.2B — 1.5× 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: 14.0% against 5.04%. Zoom Communications, Inc. has the higher net margin (65.2% vs −29.0%) and the higher return on invested capital (18.3% vs −13.2%). Across the 20 metrics below, Zoom Communications, Inc. leads on 17 and Unity Software Inc. on 3.

Valuation

Metric U ZM Software Application median
P/E n/m 8.12 24.79
P/S 8.97 5.26 2.67
P/B 5.98 2.32 3.01
Price to free cash flow 34.80 13.64 16.59
EV/EBITDA n/m 12.13 14.40
EV/Sales 8.91 3.81 2.62
Earnings yield (3.27%) 12.31% 0.00%
Free cash flow yield 2.87% 7.33% 1.91%

Profitability

Metric U ZM Software Application median
Gross margin 64.85% 77.30% 67.03%
Operating margin (30.37%) 23.73% 0.00%
Net margin (28.97%) 65.19% 0.00%
Free cash flow margin 26.54% 38.55% 4.32%
Return on equity (18.85%) 32.14% 0.00%
Return on assets (8.78%) 26.43% 0.00%
Return on invested capital (13.16%) 18.27% 0.00%

Growth

Metric U ZM Software Application median
Revenue growth (TTM) 13.98% 5.04% 12.40%
EPS growth (last fiscal year) 42.86% 92.52% —
Revenue growth, 5-year CAGR 19.08% 12.92% 13.72%
Net income growth, 5-year CAGR 0.00% 23.12% 0.00%

Health

Metric U ZM Software Application median
Debt to equity 0.74 0.00 0.02
Current ratio 2.03 3.83 1.55
Net debt to EBITDA (9.91) (5.08) 0.06

Dividend

Metric U ZM Software Application median
Dividend yield — — 1.25%
Payout ratio 0.00 0.00 0.00

Size

Metric U ZM Software Application median
Market cap 18.19b 26.49b 396.11m

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