Zoom Valuation Model. Published 6/8/2022
The information presented reflects the views and assumptions of the authors at the time of publication. Please note that this research is at least one year old and the authors' current views may materially differ from those presented without notice. The results will not be updated as ARK's internal models change, or any information upon which ARK relies upon changes.
To foster healthy debate, we have published an open source version of our Zoom valuation model. Feel free to change variables to battle test our assumptions and share your thoughts with us. We will welcome all questions, feedback, and constructive criticism. Modifiable variables are marked in red.
Read ARK’s corresponding blog with further explanation of our assumptions and thoughts on Zoom here: https://ark-invest.com/articles/analyst-research/arks-zoom-model/
Authors: Will Summerlin, Andrew Kim, and Brett Winton
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You may not use the material for commercial purposes without first obtaining written permission.
2022, ARK Investment Management LLC. All content is original and has been researched and produced by ARK Investment Management LLC (“ARK”) unless otherwise stated herein.
In this tool, you can investigate the assumptions (e.g., values in red), criteria and methodology used in this Monte Carlo simulation to determine the value of a single security in five years. A Monte Carlo simulation is intended to assist in understanding the impact of risk and uncertainty in forecasting or predicting a future event. The simulation works by assigning multiple values to a set of variables to achieve multiple results, and then averaging those results to obtain an estimate; here, this simulation is being used to predict the price of a single security in five years. The tool is inherently limited by its nature, including the assumption of perfectly efficient markets. ARK has used its research to determine what it believes are reasonable ranges for variables modeled as well as which business lines will have the biggest determination on the security’s future value. The tool is designed to forecast the price of a single security over time. Please refer to https://ark-invest.com/articles/analyst-research/arks-zoom-model/ for additional information on the assumptions, criteria and methodology used, and the limitations of this tool. The results may vary with each use and over time. This tool relies on historical information of the modeled security, including publicly available financial data sources, and analysis of that data by ARK and by third-parties, combined with ARK’s research to forecast over a five year time horizon. Please note that key inputs are included in the Zoom MC Valuation and Zoom MC TAM tabs of this GitHub document. The reader is urged to use extreme caution when considering the forecasted performance, as it is inherently subjective and reflects ARK’s long term positive view of the company. There is no guarantee that any results will align with the forecasted performance, and they might not be predictive. This tool is intended to analyze a single security, and we note that other investments were not considered that may have characteristics similar or superior to those being analyzed. This tool generates outcomes that are hypothetical in nature.
This material is for informational purposes only and does not constitute, either explicitly or implicitly, any provision of services or products by ARK. Nothing contained herein constitutes investment, legal, tax or other advice and is not to be relied on in making an investment or other decision. Investors should determine for themselves whether a particular service or product is suitable for their investment needs or should seek such professional advice for their particular situation. This material is intended only to provide observations and views of the author(s) at the time of writing, both of which are subject to change at any time without prior notice. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on ARK's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Past performance is no guarantee of future results. Equities may decline in value due to both real and perceived general market, economic, and industry conditions.
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While ARK’s current assessment of the subject company may be positive, please note that it may be necessary for ARK to liquidate or reduce position sizes prior to the company attaining any indicated valuation prices due to a variety of conditions including, but not limited to, client specific guidelines, changing market conditions, investor activity, fundamental changes in the company’s business model and competitive landscape, headline risk, and government/regulatory activity. Additionally, ARK does not have investment banking or consulting relationship with the subject company.