Analyst Peter Weed of Bernstein maintained a Hold rating on Zoom Video Communications, with a price target of $89.00.
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Peter Weed has given his Hold rating due to a combination of factors influencing Zoom Video Communications’ current market position. The company’s recent earnings showed a modest growth, with a slight increase in revenue, which indicates a steady but not exceptional performance. Despite the positive sign of declining churn rates in both enterprise and consumer segments, the overall growth remains limited, particularly with net revenue retention rates staying below 100%.
Additionally, while Zoom has been expanding its product offerings and customer base, the market is highly competitive, with challenges in passing price increases and rationalizing seats. The company’s focus on operating efficiency has led to an impressive improvement in non-GAAP operating margins, but the growth outlook remains cautious. Consequently, the maintained price target and market-perform rating reflect a balanced view of the company’s potential and current market challenges.
In another report released today, Morgan Stanley also maintained a Hold rating on the stock with a $85.00 price target.