Zenvia’s Financial Challenges Prompt Hold Rating Amid Revenue Decline and Strategic Uncertainty

In a report released today, Cesar Medina from Morgan Stanley maintained a Hold rating on Zenvia (ZENV – Research Report), with a price target of $1.60.

Cesar Medina has given his Hold rating due to a combination of factors impacting Zenvia’s financial performance. The company reported a weaker-than-expected quarter, with an 8% revenue shortfall, primarily attributed to a significant decline in its SaaS segment. This decline in SaaS revenue, coupled with unexpected cost increases, resulted in an annual normalized EBITDA of BRL105 million, which fell below the company’s guidance range of BRL120-140 million.
Furthermore, the company’s active client base experienced a notable reduction, with both CPaaS and SaaS accounts seeing declines. The company’s net income also suffered, recording a loss of BRL135 million, influenced by non-recurring expenses and increased financial costs. These factors, along with the need for more clarity on Zenvia’s future strategy and financial structure, have led Cesar Medina to maintain a cautious stance with a Hold rating.

According to TipRanks, Medina is an analyst with an average return of -5.6% and a 38.46% success rate. Medina covers the Technology sector, focusing on stocks such as CI&T, Zenvia, and VTEX.