Zoom Video Communications (ZM – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Peter Weed from Bernstein maintained a Hold rating on the stock and has a $89.00 price target.
Peter Weed has given his Hold rating due to a combination of factors impacting Zoom Video Communications. The company’s recent financial performance shows modest growth expectations, with a forward-looking guide for the next fiscal year indicating around 3% growth. This conservative outlook highlights the ongoing challenge of achieving significant growth, especially with the online business segment showing minimal growth and the enterprise business expanding only in low single digits.
On the positive side, Zoom is experiencing rapid adoption of its AI products, decreasing customer churn, and maintaining stable high free cash flow margins. These factors contribute to a positive outlook, but there are concerns about the potential impact of offering AI functionalities for free on future pricing power. Additionally, while the company is open to growth through acquisitions, any such moves would be approached cautiously. Overall, these mixed factors justify the Hold rating, with a price target maintained at $89.
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