ZoomInfo price target raised to $24 from $23 at Piper Sandler

Piper Sandler analyst Brent Bracelin raised the firm’s price target on ZoomInfo to $24 from $23 and keeps an Overweight rating on the shares following quarterly results. ZoomInfo growth rates have declined for 2-plus years falling to 5% during Q4 2023 from a peak of over 50%, exacerbated by outsized exposure to software and technology verticals where layoffs have been pronounced. That said, growth rates could be approaching bottom during the first half of 2024 as downsell pressure on customer renewals begins to ease, the firm says. Piper believes ZoomInfo appears undervalued at 16-times 2025 EV/CF, especially if growth begins to reaccelerate for business model with 40%-plus free cash flow margin potential. While ZoomInfo also has a higher risk profile given headwinds could persist, the firm argues it has “zero to hero” potential looking out to 2025 if demand stabilizes.