Analyst Meta Marshall from Morgan Stanley maintained a Hold rating on Zoom Video Communications (ZM – Research Report) and increased the price target to $85.00 from $79.00.
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Meta Marshall has given his Hold rating due to a combination of factors affecting Zoom Video Communications. The company’s recent financial performance showed better-than-expected revenue and significant improvements in the bottom line, partly due to share repurchases. There was also notable progress with new products, such as the Customer Experience and Phone revenue, which experienced substantial growth.
However, despite these positive developments, there are lingering challenges that prevent a more optimistic outlook. Deal elongation with enterprise customers and foreign exchange impacts have tempered the positive effects of the revenue beat and price increases in the Online segment. While estimates have been adjusted upwards, the growth rate remains modest, around 3%, which suggests limited stock movement in the near term. As a result, the potential for a stock re-rating is contingent on achieving a more pronounced reacceleration, which has yet to materialize.
According to TipRanks, Marshall is a 4-star analyst with an average return of 7.0% and a 58.96% success rate. Marshall covers the Technology sector, focusing on stocks such as Keysight Technologies, Pure Storage, and Hewlett Packard Enterprise.
In another report released on May 16, Scotiabank also maintained a Hold rating on the stock with a $85.00 price target.