Needham analyst Joshua Reilly maintained a Buy rating on Zoom Video Communications today and set a price target of $100.00.
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Joshua Reilly has given his Buy rating due to a combination of factors that highlight Zoom Video Communications’ strong performance and future potential. The company reported a robust third quarter, surpassing revenue expectations by 140 basis points and exceeding earnings per share estimates by 9 cents. This success was driven by solid results across both Online and Enterprise segments, showcasing a balanced performance across various products and geographical regions.
Reilly believes that Zoom’s growth will continue to surprise positively, particularly in fiscal year 2027, due to the company’s strategic focus on AI cross-selling and indirect monetization. Additionally, Zoom is expected to gain market share in customer experience and phone services, while stabilizing churn in Workplace Enterprise seats. The current valuation of the company appears low, with an EV/FCF multiple of approximately 10x, especially considering its profitability and decreasing stock-based compensation dilution. The outlook for the fourth quarter is promising, with anticipated acceleration in growth for both Online and Enterprise segments.
In another report released today, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $93.00 price target.