Needham analyst Ryan Koontz has maintained their neutral stance on ZM stock, giving a Hold rating today.
Ryan Koontz has given his Hold rating due to a combination of factors related to Zoom Video Communications’ current financial performance and future prospects. The company has shown strong cash flow in its core business, which supports its investment in AI products. However, despite beating revenue and EPS expectations, the growth in the $100k+ enterprise segment is slowing, and online sales have declined for the first time in a year.
Koontz notes that while new products like Workvivo and the Contact Center are showing promising early results, the valuation of Zoom remains at 10.3x ex-cash NG P/E based on future estimates. The Hold rating reflects the need for these new products to achieve significant scale and for total revenue growth to reach higher single-digit percentages year-over-year before considering an upgrade in the stock’s rating.
In another report released today, Bernstein also maintained a Hold rating on the stock with a $89.00 price target.
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