Zoom Video Communications: Hold Rating Amid Modest Growth and Macroeconomic Challenges

Bernstein analyst Peter Weed has maintained their neutral stance on ZM stock, giving a Hold rating today.

Peter Weed has given his Hold rating due to a combination of factors influencing Zoom Video Communications. The company’s recent earnings report showed a slight beat and an increased full-year guidance, largely attributed to a minor pricing increase for specific customers. However, the guidance was described as cautious due to challenges like deal elongation and macroeconomic uncertainties.
Despite these challenges, Zoom has demonstrated strong customer retention, especially among large enterprises, and has shown growth in areas like AI-enabled services and HR tools. The company’s robust cash flow and strong gross margins are positive aspects, but the overall growth trajectory remains modest. Consequently, the valuation remains stable with a Market-Perform rating and a price target of $89, reflecting a balanced view of potential risks and opportunities.

In another report released today, Wells Fargo also maintained a Hold rating on the stock with a $80.00 price target.