Zack Morris's avatar
$13.3m follower assets
ARK's open-source Zoom Model $ZM
ARK last week published their open-source Zoom model on Github and accompanying blog post explaining their assumptions.

First, I love that they publish these open-source models and invite feedback. I generally find them quite insightful and, contrary to popular belief, not exceedingly fanciful.

Their Zoom model is no different. I'm a Zoom bull (at current prices of ~$100/share) and have an ultra-conservative bear case fair value estimate of $125 on the stock.

My two biggest pushbacks on their model assumptions are:

1) They assume 75% of knowledge workers will be hybrid/remote by 2026, up from 51% in 2021, a period when seemingly the vast majority of knowledge workers globally were forced into hybrid/remote work environments due to the pandemic. Since in seemingly best-case-scenario conditions for hybrid/remote work, penetration still only reached 51%, what gives them such confidence that as those conditions subside, penetration will nonetheless grow to 75%?

2) A significant portion of their base-case 2026 ARPU estimates come from Zoom IQ and future AI-enhanced products and services. I agree that Zoom IQ seems like it has the potential to be a great product, but do we have any evidence yet that it works? For example, sales teams adopting Zoom IQ reporting an increase in conversions and/or efficiency?

What other future AI-enhanced products and services do they have in mind? Simply assuming brand new products and services is too aggressive for a base-case, in my opinion.

What does everyone think about the model/model assumptions?
Nathan Worden's avatar
This is awesome commentary on Ark's open source model— I agree that in a base case its a good idea to make your assumptions as reasonable and well-defined as possible. To say "New products" but not have many tangible ideas of what those are is too optimistic.
Fat Baby Funds's avatar
The “bear” cases they come up with drive me a little crazy. Crazy crazy bulls
Rihard Jarc's avatar
Great points of concern you bring up, I agree.