Zoominfo Technologies Inc.: Is The Company Worth Investing In?
ZoomInfo Technologies Inc. was founded in 2000. At first, it was a company that specialized in building datasets for helping marketers and salespeople. However, as the company grew, infusions of capital and numerous acquisitions led the business to evolve. Its February 2020 takeover by enterprise software operator DiscoverOrg was the company’s most recent deal of significance.
Today, the company is a global provider of marketing solutions, along with custom data management, demand generation, account management, and prospecting solutions. The ZoomInfo database consists of more than 5 million executive-level contacts, 16 million decisionmaker direct dials, and more than 100 million verified business professionals. However, despite its successes over the years, investors ask one pertinent question; is the company worth investing in?
In this post, we’ll delve deeper into the company’s financial details to give you a clear picture and a clearer answer to the question.
Recent financial info
In recent times, ZoomInfo Technologies has experienced robust growth, with a 62% increase in revenues amounting to $110.9 million being reported in the last quarter. A further $25.3 million cash flow came in from the company’s operations.
In August, shareholders such as 22C Capital, Carlyle Group, and TA Associates sold a combined 14.9 million shares, with each share priced at $37. The transactions came soon after the company’s IPO and are indicative of the positive feeling that investors have regarding ZoomInfo’s stock.
However, with new tech IPOs around the corner from big players such as Bumble, Unity, and Airbnb, the attention that ZoomInfo’s stock is now attracting from investors may fade. Also, since the IPO, the value of the company’s shares has dipped from $64 to $34.
In terms of profitability, market experts predict that the company will report a profit of $60 million in the fiscal year 2021, even though losses are expected for the remainder of 2020. Even though a growth rate of 115% would be needed for the company to break-even, it’s not entirely unthinkable. If the figure goes beyond what experts expect, the company is bound to become profitable sooner rather than later.
Another thing that investors should be wary of is that as of now, the company is debt-ridden. ZoomInfo Technologies’ debt exceeds its equity by 90%, while experts say anything beyond 40% is risky business. So, investors who’d like some stability before investing in ZoomInfo Technologies should wait before investing in the ZoomInfo stock.