Navigating Stock-Based Compensation and Employee Satisfaction

This episode is a replay of a webinar recorded on May 15th, where Ed Moya interviews Doug Garber, founder of Pitch the PM and Westport Alpha. Doug walks through his 10-step Variant View Checklist to make the case for Zoom ($ZM). Once seen as a COVID-era relic, Zoom is now a misunderstood, cash-rich business with sticky enterprise traction, product expansion into UCaaS, and a setup that offers asymmetric upside if growth reaccelerates.

1. What ACTION do I want the Portfolio Manager to take?
Doug owns $ZM after hearing Sean Emory pitch it in Episode 2. He sees it as a high-conviction long with multiple ways to win. The company trades at a depressed multiple despite $7B in cash, strong real FCF, and signs of growth reaccelerating through enterprise attach rates and product expansion beyond core video.

2. Do I UNDERSTAND this business?
Yes. Doug is a longtime user of Zoom and its competitors. He's reviewed expert calls via AlphaSense, spoken to the company, and built conviction through firsthand usage and external diligence.

3. Is the stock available at a REASONABLE price today?
Yes. Zoom trades at an 8–10% unlevered FCF yield, and Doug adjusts for dilution of ~2–3% annually. The company remains profitable, debt-free, and is actively buying back shares.

4. Why is this stock MIS-PRICED?
The decline in Zoom’s online SMB segment has masked steady enterprise growth. The market sees stagnation. Doug sees a business quietly transitioning into a sticky UCaaS platform with pricing power, expanding attach rates, and increasing value per seat.

5. What is the VARIANT VIEW vs the street?
Doug believes the street underestimates Zoom’s ability to reignite growth. While consensus focuses on competition from Microsoft and Google, Doug sees Zoom executing faster, particularly with Zoom Phone, Contact Center, and AI integrations.

6. What is the EVIDENCE?
He cites AlphaSense expert calls and customer examples—one enterprise boosted spend from $150K to $500K after adopting Zoom Phone. Product feedback is strong, engineering hires from Microsoft signal talent migration, and real-time data from web traffic, app downloads, and channel checks support traction.

7. What are the CATALYSTS for the street to realize the view?
Improved enterprise attach, stabilization in online, AI companion usage, strategic M&A or capital deployment, and beat-and-raise quarters are potential catalysts. Investor perception could shift as Zoom repositions as a broader platform with pricing leverage.

8. What is it WORTH if the bet is right?
Doug sees upside to $150/share. If growth improves to mid-single digits and the FCF yield compresses to 4–5%, the stock could deliver 70–90% total upside over time. Optionality from the $7B balance sheet could accelerate that outcome through smart M&A.

9. What is the OTHER SIDE of the bet?
Downside risk exists if growth flattens or declines further. Doug estimates 20–30% downside in that case, but the $7B in cash and stable FCF provide a strong margin of safety. Even in a bear case, the asset could be attractive to a strategic acquirer.

10. Is MANAGEMENT ALIGNED with ownership?
Mixed. Founder Eric Yuan still owns ~8% and recently returned to a product-focused role. However, stock-based comp has been elevated, though the company is now shifting toward cash comp. Culture and product velocity remain strengths.

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Disclaimer: Not investment advice. Guests may hold positions and are under no obligation to update. Do your own research and consult with a financial advisor. Shorting is risky and should be discussed with a professional.