Zoom Video Communications,
the online meeting software that boomed during the Covid-19 pandemic, is aiming for a new burst of growth. Analysts are divided on how likely
will get it.
Zoom Video (ticker: ZM) fell 4.5% to $63.05 Tuesday after posting an earnings beat after the closing bell Monday. The company showed progress on improving profitability and reducing the churn of lower-paying customers.
The shift to remote work during the pandemic was a boon for Zoom as it took advantage of the sudden surge in demand for its services. Since then, the firm’s prospects have petered out. Shares have fallen down 14% from a year ago and have collapsed from a peak price above $500 in late 2020. The stock gets 18 Hold ratings on FactSet compared with 9 Buy ratings.
Mizuho analysts led by Siti Panigrahi said that the company could have several “longer-term growth levers,” including its artificial intelligence companion and virtual agent products. They say Zoom trades at an attractive valuation and give it a Buy recommendation with a $100 price target.
RBC Capital Markets also rates the shares Outperform. Analysts led by Rishi Jaluria note that Zoom had a good quarter but that “visibility into reacceleration is still unclear.”
KeyBanc was more skeptical about the company’s prospects. Analysts led by Thomas Blakey said that macroeconomic forces were still working against Zoom, and blamed that for why there was little guidance about future growth. They rate the shares at Sector Weight, the equivalent of Hold.
Write to Brian Swint at [email protected]