Paycom, Zoom, DocuSign, Constellation, GitLab Trending With Analysts

Analysts are intrested in these 5 stocks: ( (PAYC) ), ( (ZM) ), ( (DOCU) ), ( (STZ) ) and ( (GTLB) ). Here is a breakdown of their recent ratings and the rationale behind them.

Paycom is back in analysts’ good graces, with Allan Verkhovski upgrading the stock to Buy and setting a $195 price target. He argues that, despite a disappointing third quarter that saw revenue growth slow to 10.6% and the stock fall 17% year-to-date, the market is now underestimating Paycom’s ability to sustain double‑digit recurring revenue growth. Management is guiding to 11% growth exiting 2025, and while Verkhovski expects 2026 guidance to start conservatively at 9% growth, he believes the company can still deliver 10%+ over time. Short‑term risks around the next earnings print remain, but the analyst sees an attractive risk‑reward profile with shares trading around 17x estimated 2027 free cash flow and 19x 2027 GAAP earnings.

The bullish thesis leans heavily on Paycom’s automation tools—Beti, GONE, and the new AI engine IWant—which are designed to deepen customer relationships and drive more recurring revenue. Beti can cut payroll-processing labor by up to 90% and sharply reduce error‑correction time, while GONE streamlines HR interactions for employees, managers, and administrators. IWant, a voice‑activated AI assistant, benefits as customers adopt more modules, creating a natural incentive for cross‑selling. Paycom ramped marketing spend in the third quarter to support these products, and initial feedback on IWant’s launch has been positive, suggesting that product‑led growth could re‑accelerate sales as macro headwinds ease.

Under the surface, Paycom still has substantial runway in its core market, which Verkhovski believes can underpin a return to stronger growth. The company is expected to finish the year serving 7.2 million employees, only about 12% of its estimated addressable market of 59 million employees, and around 19,500 clients, or 8% of its client TAM. While client count has been flat year‑over‑year, the analyst expects a return to client growth as the go‑to‑market model stabilizes and the value proposition of the AI and automation suite becomes clearer. If retention can improve to at least 91%, even modest gains in penetration could translate into durable double‑digit recurring revenue growth.

Paycom is also tightening its own operations, which should support earnings and cash flow even if revenue growth stays in the low double digits. The company recently cut about 7% of its workforce—roughly 500 employees, mostly in administrative roles—and is on track to finish the year with a record adjusted EBITDA margin of 43% and GAAP operating margins around 27%. At the same time, Paycom is aggressively returning capital to shareholders, having repurchased 1 million shares last quarter at an average price of $222 and with $1.2 billion remaining on its authorization, which the analyst expects the company to use quickly.

From a valuation standpoint, Verkhovski’s $195 target price equates to about 4.5x 2027 estimated enterprise value to free cash flow, roughly in line with slower‑growing peers but potentially attractive given Paycom’s higher margins and recurring‑revenue profile. He also notes that recent private‑equity takeouts in the HR software space—such as Paycor and Dayforce—were executed at far richer multiples on both sales and free cash flow. That comparison, combined with Paycom’s ongoing investment in proprietary AI data centers and improving internal efficiency, supports the view that the stock offers a favorable entry point for investors willing to look beyond near‑term macro and execution noise.

Zoom Video Communications is also drawing fresh optimism from the analyst community, with Allan Verkhovski assuming coverage at Buy and assigning a $105 price target. Zoom shares are up about 10% year‑to‑date after a strong third quarter that lifted the stock another 10% the day after earnings, and the analyst believes the company can nudge revenue growth back above 5%, taking annualized revenue toward $5 billion. The engine behind this improvement is the Enterprise segment, where revenue growth is expected to reach 7% or more, and the legacy Online business is stabilizing with record‑low churn of 2.7%. A potential price increase for annual subscribers and cross‑selling of the Bonsai product could further support growth in the coming year.

Verkhovski highlights Zoom’s diversification beyond basic video meetings as a key driver of his bullish stance. The company’s customer‑experience (CX) business is growing at a high double‑digit pace, Zoom Phone annual recurring revenue is still rising in the mid‑teens, and Workvivo—Zoom’s employee‑engagement platform—is riding strong momentum even after lapping a major partnership with Meta. Enterprise dollar churn has fallen for five straight quarters, and Zoom is gaining larger customers, as evidenced by faster growth in accounts spending more than $100,000 annually. These trends point to a healthier mix shift toward stickier, higher‑value corporate relationships.

Artificial intelligence is another bright spot where the analyst sees more opportunity than risk for Zoom. While AI disruption has been a concern across many software names, Verkhovski argues that AI risk is relatively low for Zoom because the company is already embedding AI in ways that strengthen the product and support monetization. The flagship AI Companion 3.0 is included for paying customers and helps retention, while higher‑end offerings such as Custom AI Companion are being directly monetized, especially among large enterprises. In the CX segment, AI‑powered features like Zoom Virtual Agent and AI Expert Assist are already appearing on most of the company’s biggest deals, suggesting AI is becoming a significant revenue driver rather than a distant promise.

Zoom’s balance sheet and capital‑return strategy also bolster the Buy call. The company has been sitting on more than $4 billion in cash for years, with the total exceeding $7 billion recently, and management has shown little appetite for large, transformative acquisitions despite periodic speculation. Instead, Verkhovski expects Zoom to stick with smaller, “tuck‑in” deals like Workvivo and BrightHire while using the bulk of its free cash flow to repurchase stock. Over the last twelve months, Zoom has spent roughly 82% of free cash flow—around $400 million per quarter—on buybacks, all while stock‑based compensation as a percentage of revenue is falling. With SBC expected to drop from about 16% of revenue to below 12% beyond fiscal 2028, the analyst sees a clear path to 30% GAAP operating margins.

On valuation, the $105 target is based on 13x 2027 estimated enterprise value to free cash flow, in line with other mature software peers growing revenue in the mid‑single digits. For investors, the story is less about hyper‑growth and more about a profitable, cash‑rich platform that is steadily reshaping itself into a broader communications and customer‑experience ecosystem. With stabilizing churn, improving enterprise mix, and visible AI‑driven monetization, Verkhovski believes Zoom offers a relatively low‑risk way to gain exposure to the next phase of collaboration and CX software, especially for those who value cash generation and buybacks as much as top‑line growth.

DocuSign is another name where Allan Verkhovski sees a mispriced opportunity, initiating coverage with a Buy rating and an $88 price target. The stock sits roughly 34% below last year’s peak of $107, after a year marked by execution wobbles and investor anxiety. Early in the year, DocuSign missed its billings guidance for the first time since fiscal 2022 due to slower‑than‑expected early renewals following changes to its sales strategy, and the debut of OpenAI’s “DocuGPT” raised fears of future competition. The company has also announced that it will shift from guiding on billings to guiding on annual recurring revenue (ARR) starting next quarter—a change that initially added to uncertainty. Verkhovski, however, views these developments as catalysts rather than red flags, arguing that ARR is a better measure of the underlying business and that the current pullback offers a “great buying opportunity.”

Central to his optimism is DocuSign’s AI‑driven platform, IAM, which stands for Intelligent Agreement Management and is designed to cover the full life cycle of contracts rather than just e‑signatures. IAM is trained on private, contract‑specific data, which the company says gives it a 15‑percentage‑point precision advantage over models trained purely on public information. DocuSign plans to make IAM available within ChatGPT and other environments via OpenAI’s Model Context Protocol, turning a perceived threat into a distribution channel. IAM is expected to represent a low double‑digit percentage of ARR as soon as next quarter, and the analyst notes a clear “halo effect”: customers adopting IAM exhibit higher gross retention, increased e‑signature usage, and accelerating subscription revenue and billings, now growing at 8.8% and 9.6% respectively.

Verkhovski believes IAM can be a meaningful growth engine over the next several years, estimating it could add 170 basis points to subscription revenue growth next year and 120 basis points in fiscal 2026. He expects subscription revenue growth to accelerate to about 10% by the second quarter of fiscal 2027, with his bull case calling for DocuSign to return to the “Rule of 40” benchmark—where growth plus profit margins equal or exceed 40%—as soon as next year. While non‑GAAP operating margins are projected to pause around current levels in fiscal 2026 after a major jump from 20.5% in fiscal 2023 to 29.8% in fiscal 2025, the analyst sees this as a deliberate trade‑off to fund future growth rather than a sign of cost pressure.

On the cost and capital‑allocation side, DocuSign’s heavy stock‑based compensation is a current drag but also a potential lever for margin expansion. SBC stands at roughly 20–21% of revenue, and Verkhovski argues that if the company brought SBC per employee down to the peer median, its 2024 SBC would have been around $425 million, or 14% of revenue, versus the current $612 million. Management has already been offsetting dilution by using more than 80% of quarterly free cash flow on share buybacks over the last three quarters, suggesting a serious commitment to shareholder returns. The analyst also underscores DocuSign’s structural advantages versus generic large language models: proprietary contract data, built‑in workflows and audit trails, enterprise‑grade security for more than 87% of the Fortune 1000 and the U.S. federal government, and proven scalability.

From a valuation perspective, Verkhovski’s $88 target is based on 17x 2027 estimated EV/FCF, in line with other software names expected to grow revenue in the high single digits. For investors, DocuSign offers an intriguing combination of an improving growth profile, a differentiated AI platform deeply embedded in mission‑critical contract processes, and the prospect of further margin expansion as SBC normalizes. If IAM adoption continues to lift retention and cross‑sell while ARR guidance brings more clarity to results, the analyst believes the market could rerate the stock closer to its historical highs.

Constellation Brands is the clear outlier in this group, with Jefferies analyst Kaumil Gajrawala shifting to a more cautious stance and downgrading the stock to Hold, setting a $154 price target. The call reflects a reassessment of the company’s near‑term growth prospects, especially in its core U.S. beer business, which has historically been a standout performer. Gajrawala acknowledges that the stock’s valuation looks optically cheap at roughly 12x forward earnings versus a 10‑year average closer to 19x, but he argues that the fundamentals no longer justify a premium multiple. In his view, the demand environment is more challenging and likely to remain so longer than previously thought, making it “too early” to call a sustainable inflection.

The crux of the downgrade is the growing pressure on Constellation’s crucial Hispanic consumer base, which accounts for over 40% of its beer portfolio according to Numerator data. Survey work conducted with the KFF–New York Times highlights the social and economic strain: the share of respondents who know someone arrested, detained, or deported since early 2025 has nearly tripled, and the figure is even higher among Hispanic immigrants. As a result, 41% of Hispanic respondents say they are avoiding activities outside the home—from travel to work and healthcare—versus 30% in the broader sample. Gajrawala argues that these behavior shifts directly affect discretionary purchases like beer, particularly for away‑from‑home consumption, and could weigh on volumes for longer than the market expects.

That pressure is already showing up in the numbers. Constellation’s beer consumption trends remain negative, with third‑quarter volume down 2.9% compared with a 0.4% decline over the last 52 weeks based on U.S. NielsenIQ data. The analyst models a steep 6.3% volume decline in fiscal 2026 and only flat volumes in fiscal 2027, a far cry from the mid‑ to high‑single‑digit organic sales growth the company used to deliver. While management is working on strategies to stabilize demand, including marketing and portfolio initiatives, Gajrawala sees “a lot of work to do” before investors can be confident that the growth engine is back on track. The once‑celebrated Modelo brand story now faces questions about how much distribution runway is left.

On the positive side, Constellation is approaching a period where heavy capital expenditures should begin to taper, which could free up more cash for shareholders. Gajrawala expects capex to fall from about $1.2 billion in fiscal 2025 to roughly $670 million in fiscal 2027, allowing room to return around $2 billion to shareholders that year through buybacks and dividends. Combined with an estimated 80 basis points of gross‑margin expansion, SG&A leverage, and ongoing repurchases, the analyst forecasts about 9% EPS growth in fiscal 2027. However, he does not believe this is enough to warrant a material re‑rating in the absence of clear volume growth.

Gajrawala’s $154 price target is based on 10.5x estimated fiscal 2028 EBITDA of about $3.6 billion, implying that Constellation may trade in a relatively tight valuation band—around 10–11x EBITDA—until there is evidence of a demand recovery. For investors, the message is that the stock may be “cheap for a reason”: while cash returns should support the floor, the path to upside likely requires a convincing turnaround in beer volumes and improved visibility around the Hispanic consumer. Until then, Jefferies advises a wait‑and‑see approach rather than aggressive buying.

In contrast to Constellation’s caution, GitLab is attracting renewed enthusiasm, with BTIG analyst Nick Altmann assuming coverage from a colleague and reaffirming a Buy rating alongside a $52 price target. GitLab, a DevSecOps platform that unifies development, security, and operations across the software lifecycle, is positioned at the heart of what Altmann calls an AI‑driven “explosion in software development.” While the company has been slower than some peers to monetize artificial intelligence directly, the analyst believes its integrated approach—offering DevSecOps functionality on a single platform with flexible deployment options—makes it a natural beneficiary as development budgets expand.

Recent quarterly results were mixed at the headline level but encouraging beneath the surface. For the third quarter of fiscal 2026, GitLab delivered modest revenue upside and raised its full‑year growth framework to 24.7% from 23.7%, though headwinds in small‑ and mid‑sized business customers (about 8% of ARR) and public sector clients (about 12% of ARR) limited the surprise. The bigger positive came from profitability: operating margins beat expectations by roughly five percentage points, and Altmann expects GitLab to expand operating margins by about six points in fiscal 2026, translating into free‑cash‑flow margins near 22%. Those improving margins, the analyst argues, provide a “valuation backstop” even if top‑line growth moderates.

The centerpiece of GitLab’s growth story is its evolving AI portfolio, particularly the impending general availability of the GitLab Duo Agent Platform. Building on earlier launches like Duo Pro and Duo Enterprise—which offer AI‑assisted code generation, testing, chat, and vulnerability analysis—the Duo Agent Platform is designed as an “agentic” system that works alongside developers across the entire software development lifecycle. It can tap into context from a customer’s GitLab instance, enabling more powerful automation and guidance. Notably, GitLab has already closed several Duo Agent Platform deals ahead of the official launch, indicating pent‑up demand from enterprises looking to streamline and accelerate development.

Altmann does caution that adoption of the Duo Agent Platform will be gradual. Roughly 70% of GitLab’s revenue comes from self‑managed customers, who will need to upgrade to the latest GitLab version to access the new capabilities—a process that often takes several quarters. The platform will be priced using a credit‑based system, either on demand or via upfront commitments, which could provide more predictable and durable revenue as usage scales. As one‑time tailwinds from previous Premium tier price increases taper off in fiscal 2027, success with the Duo Agent Platform and other AI offerings will be crucial to sustaining growth and improving the narrative around the stock.

On the numbers, Altmann makes only minor tweaks to his models, now projecting revenue growth of 24.6% in fiscal 2026, 17.8% in fiscal 2027, and 15.3% in fiscal 2028. His $52 price target is based on 27x 2027 estimated enterprise value to free cash flow, a premium multiple that he argues is justified by GitLab’s combination of solid mid‑teens‑plus growth, rising profitability, and strategic position in an AI‑accelerated development world. For investors seeking exposure to software tooling that could gain budget share as AI drives more code to be written, GitLab stands out as a high‑beta, higher‑risk but potentially rewarding way to participate in that trend.