Shares of ZoomInfo Technologies jumped by almost 12% in Monday’s extended trading session after the market intelligence software company posted fourth-quarter earnings that topped analysts’ estimates.
The company reported 4Q adjusted diluted earnings per share (EPS) of $0.12 that came in ahead of analysts’ expectations of $0.10. Revenues in the fourth quarter came in at $139.7 million, an increase of 53% year-on-year, beating consensus estimates of $130.3 million.
ZoomInfo (ZI) CEO Henry Schuck said, “We ended the year strong, delivering another quarter of record results, highlighted by an industry-leading combination of growth and profitability. Our success is driven by the success of our customers, as we continue to help companies of all sizes, across all industries modernize their go-to-market efforts with our expanding data, insights, and automation platform.”
Separately, the company also announced organizational changes with Chris Hays being promoted to Chief Operating Officer, Hila Nir promoted to Chief Product Officer, and Shane Murphy-Reuter joining ZI as Chief Marketing Officer.
In the fourth quarter, ZI recorded operating cash flows of $66.8 million and unlevered free cash flow (FCF) of $76.6 million. The company closed the year with more than 20,000 customers that included more than 850 customers with an annual contract value of $100,000.
The company expects its non-GAAP adjusted net income per share to land between $0.10 to $0.11 in 1Q FY21 and on revenues of between $144 million to $146 million. For the full-year 2021, revenues are projected at $645 million to $655 million and non-GAAP adjusted EPS to range between $0.47 to $0.49 in FY21. (See ZoomInfo Technologies stock analysis on TipRanks)
Ahead of the earnings announcement, Stephens analyst Ryan MacWilliams reiterated a Buy and a price target of $60 (17% upside potential) on the stock. MacWilliams said, “Investor concerns on the magnitude of pricing increases from customers migrating to the new ZI platform (legacy ZI/DiscoverOrg customers) has remained top-of-mind, and a weaker-than-expected guide could reinvigorate this bear case…”
“Overall, we wouldn’t miss the forest for the trees (we think guidance will be conservative but ultimately fine) as enterprises are shifting towards data-driven S&M [sales and marketing], which includes ZI’s >$1 bil. opportunity within existing enterprise customers,” MacWilliams added.
Overall, analysts are bullish on the stock with a Strong Buy consensus rating. That’s based on 3 analysts recommending a Buy. The average analyst price target of $59.33 implies 15.6% upside potential to current levels.