ABCDEFGHIJKLMNOPQRSTUVWXYZ
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Scroll down to find the scenario with your breakout room number
https://docs.google.com/spreadsheets/d/1V_6EhTfH9AiruKC1nagQKjqJn4cJ9UJ6buaZIa-QPYE/edit?usp=sharing
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Note your scenario assumptions & change parameters accordingly (operating mgn & revenue growth)
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ScenarioNPVProb
Sources of Uncertainty:
P(Yes)P(No)
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0. Best case: Rivals withdraw; Zoom innovates
$69,226,04012.5%12.5%
* Rivals attack on price
50.0%50.0%
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1. Mid1: Rivals withdraw; Zoom lags
$69,226,04012.5%12.5%
* Rivals match quality
50.0%50.0%
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2. Mid2: Rivals' quality fails; Price war; Zoom lags
$69,226,04012.5%12.5%
* Zoom keeps innovating
50.0%50.0%
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3. Mid3: Rivals' quality fails; Price war; Zoom innovates
$69,226,04012.5%12.5%
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4. Mid4: Rivals' fix quality; No price war; Zoom lags
$69,226,04012.5%12.5%
Analyst estimates
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5. Mid5: Rivals' fix quality; No price war; Zoom innovates
$69,226,04012.5%12.5%
* Industry size (revenue):
$3.85B
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6. Mid6: Rivals' fix quality; Price war; Zoom innovates
$69,226,04012.5%12.5%
* Industry growth (CAGR):
9.90%
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7. Worst case: Rivals' fix quality; Price war; Zoom lags
$69,226,04012.5%12.5%
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Expected value created:
$69,226,040100.0%
Zoom Mkt Capitalization
%Change
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7/30/19$25,440,000
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7/30/20$70,526,000177.2%
In one year...
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8/27/20$83,130,00017.9%
In one month...
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17
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0. Best case: Rivals withdraw; Zoom innovates
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-Post Rival Response-
----------Zoom Historical----------
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AssumptionsInitialValueWhen(yr)AvgMaxMin
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Operating Inc Mgn
0.8%1.2%20260.8%3.3%-3.2%
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Revenue Growth
120.2%40.0%2026120.2%149.1%88.4%
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Amortization % Sales
2.2%2.2%2.6%1.8%
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Tax rate24.3%24.3%108.9%-8.6%
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WACC5.5%
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Terminal Growth rate
2.0%
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Zoom 2020 valuation based on expected cash flows
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Thousands$2020202120222023202420252026202720282029Terminal
31
Revenue622,6581,370,9313,018,4326,645,80014,632,32032,216,55545,103,17763,144,44888,402,227123,763,118
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Operating Income
5,02311,06024,35053,613118,041259,897545,783764,0961,069,7341,497,628
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Taxes1,2202,6875,91613,02628,67963,143132,601185,641259,898363,857
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Depreciation/Amort
13,53429,79865,607144,449318,039700,240980,3351,372,4701,921,4582,690,041
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Cash flows17,33638,17084,041185,036407,402896,9931,393,5171,950,9242,731,2943,823,811111,436,786
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NPV$69,226,040
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38
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Black
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1. Mid1: Rivals withdraw; Zoom lags
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-Post Rival Response-
----------Zoom Historical----------
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AssumptionsInitialValueWhen(yr)AvgMaxMin
47
Operating Inc Mgn
0.8%1.2%20260.8%3.3%-3.2%
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Revenue Growth
120.2%40.0%2026120.2%149.1%88.4%
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Amortization % Sales
2.2%2.2%2.6%1.8%
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Tax rate24.3%24.3%108.9%-8.6%
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WACC5.5%
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Terminal Growth rate
2.0%
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Zoom 2020 valuation based on expected cash flows
55
Thousands$2020202120222023202420252026202720282029Terminal
56
Revenue622,6581,370,9313,018,4326,645,80014,632,32032,216,55545,103,17763,144,44888,402,227123,763,118
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Operating Income
5,02311,06024,35053,613118,041259,897545,783764,0961,069,7341,497,628
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Taxes1,2202,6875,91613,02628,67963,143132,601185,641259,898363,857
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Depreciation/Amort
13,53429,79865,607144,449318,039700,240980,3351,372,4701,921,4582,690,041
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Cash flows17,33638,17084,041185,036407,402896,9931,393,5171,950,9242,731,2943,823,811111,436,786
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NPV$69,226,040
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63
64
65
66
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Blue
68
2. Mid2: Rivals' quality fails; Price war; Zoom lags
69
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-Post Rival Response-
----------Zoom Historical----------
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AssumptionsInitialValueWhen(yr)AvgMaxMin
72
Operating Inc Mgn
0.8%1.2%20260.8%3.3%-3.2%
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Revenue Growth
120.2%40.0%2026120.2%149.1%88.4%
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Amortization % Sales
2.2%2.2%2.6%1.8%
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Tax rate24.3%24.3%108.9%-8.6%
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WACC5.5%
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Terminal Growth rate
2.0%
78
79
Zoom 2020 valuation based on expected cash flows
80
Thousands$2020202120222023202420252026202720282029Terminal
81
Revenue622,6581,370,9313,018,4326,645,80014,632,32032,216,55545,103,17763,144,44888,402,227123,763,118
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Operating Income
5,02311,06024,35053,613118,041259,897545,783764,0961,069,7341,497,628
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Taxes1,2202,6875,91613,02628,67963,143132,601185,641259,898363,857
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Depreciation/Amort
13,53429,79865,607144,449318,039700,240980,3351,372,4701,921,4582,690,041
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Cash flows17,33638,17084,041185,036407,402896,9931,393,5171,950,9242,731,2943,823,811111,436,786
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NPV$69,226,040
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88
89
90
91
Green
92
3. Mid3: Rivals' quality fails; Price war; Zoom innovates
93
94
-Post Rival Response-
----------Zoom Historical----------
95
AssumptionsInitialValueWhen(yr)AvgMaxMin
96
Operating Inc Mgn
0.8%1.2%20260.8%3.3%-3.2%
97
Revenue Growth
120.2%40.0%2026120.2%149.1%88.4%
98
Amortization % Sales
2.2%2.2%2.6%1.8%
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Tax rate24.3%24.3%108.9%-8.6%
100
WACC5.5%