Entering text into the input field will update the search result below

ZoomInfo: Not Worth The Premium Multiple With Organic Growth Slowing

May 04, 2022 2:09 AM ETZoomInfo Technologies Inc. (ZI)2 Comments
Gary Alexander profile picture
Gary Alexander


  • Shares of ZoomInfo jumped ~5% after reporting Q1 results which beat Wall Street's growth expectations.
  • A good chunk of ZoomInfo's revenue, however, is being sourced from acquisitions.
  • The company recently layered in two additional tuck-in acquisitions in April.
  • Trading at a ~21x forward revenue run rate, ZoomInfo is too expensive to be considered in the current safety-oriented market.
  • Looking for a helping hand in the market? Members of Daily Tech Download get exclusive ideas and guidance to navigate any climate. Learn More »
Customer shaking hands with car salesman buying a car

FG Trade/E+ via Getty Images

For some reason, ZoomInfo (NASDAQ:ZI) has been one of the few tech growth stocks to be able to retain extraordinarily expensive valuation multiples despite the steep correction that has impacted the rest of the sector. This sales-oriented software company, which is

For a live pulse of how tech stock valuations are moving, as well as exclusive in-depth ideas and direct access to Gary Alexander, subscribe to the Daily Tech DownloadHighly curated focus list has consistently netted winning trades of 40%+.

This article was written by

Gary Alexander profile picture
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (2)

Joseph Webster profile picture
I went long ZI this week. Here's my take:

- Companies that have a history of surpassing ER estimates deserve a premium. ZI has beat ER estimates on both top and bottom lines for at least a year, maybe longer. There is a good chance that ZI will continue to grow at a faster rate than projections.
- One of the biggest weaknesses in the tech sector is reaching GAAP profitability. ZI is profitable on a GAAP basis and even with a possible deterioration in margins, should be able to expand the bottom line in the future. Also, the FWD PE ratio is 62, which is not unreasonable at all for a company growing at this rate.
- While I recognize that other companies in the sector have fallen harder in this market, that could be interpreted a couple different ways. Yes, it is not as cheap as some other companies, but companies that retain relative strength in these markets often outperform those that have fallen harder
rt94103 profile picture
Long. While a year old, I like Bert's take...

Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.