JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Tuesday, Benchmark analyst Matthew Harrigan reaffirmed a Buy rating and a $97.00 price target for Zoom Video Communications Inc. (NASDAQ:ZM), ahead of the company’s first-quarter fiscal year 2026 earnings release scheduled for May 21. The company, currently trading at $83.31, appears undervalued according to InvestingPro Fair Value metrics, with a PEG ratio of just 0.46 indicating attractive growth potential relative to its valuation. Harrigan highlighted Zoom’s ongoing development in agentic artificial intelligence (AI), which is designed to anticipate user needs and take autonomous actions.
Zoom’s Chief Technology Officer, XD Huang, has outlined the company’s vision for agentic AI, which includes capabilities such as reasoning, long-term memory, and task orchestration. These advancements aim to transform Zoom from a video conferencing platform to an AI-first productivity company. With impressive gross margins of 75.79% and a strong financial health score rated as "GREAT" by InvestingPro, the company appears well-positioned to invest in AI innovation. The AI technology being developed by Zoom is expected to enhance human collaboration by providing around-the-clock monitoring, analysis, and recommendations.
The company’s AI capabilities have expanded beyond virtual meetings, utilizing specialized small language models and a two billion parameter model that demonstrates strong general benchmark performance. Zoom’s focus is on enhancing collaboration rather than replacing human interaction. With a healthy balance sheet showing more cash than debt and diluted earnings per share of $3.21, the company maintains a solid foundation for its AI investments. Discover more insights about Zoom’s financial strength with InvestingPro’s comprehensive research report, available along with 8 additional ProTips.
Last month, Zoom introduced the Custom AI Companion, which integrates workplace tasks with customer agents to support personalization and facilitate access to third-party tools. Additionally, earlier this month, Zoom announced a strategic partnership with ServiceNow (NYSE:NOW), aiming to simplify the agent experience and offer more personalized customer engagement through a direct integration within the ServiceNow AI Platform.
Harrigan’s reiteration of the Buy rating and price target comes as Zoom prepares to discuss these AI advancements during the upcoming earnings call, although the new technologies are not yet expected to contribute significantly to the company’s top-line growth despite the pace of innovation.
In other recent news, Zoom Video Communications Inc. reported several significant developments. Scotiabank (TSX:BNS) raised its price target for Zoom to $85, maintaining a Sector Perform rating, highlighting Zoom’s new AI-first hybrid solutions and its expanded Zoom Workplace for Frontline (NYSE:FRO). Meanwhile, Piper Sandler lowered its price target to $77, citing factors like foreign exchange changes and a cautious outlook on revenue growth, but maintained a Neutral rating. Zoom’s financial health is underscored by its strong balance sheet, including a net cash position of $7.8 billion.
Additionally, Zoom and ServiceNow announced an integration of their platforms to enhance customer service capabilities, combining Zoom’s AI-first contact center platform with ServiceNow’s CRM and ITSM workflows. In governance news, Zoom agreed to corporate governance reforms as part of a settlement in a stockholder derivative action, pending final court approval. This settlement includes implementing specific governance reforms and covering legal fees.
Furthermore, Zoom announced a change in its executive team, with CFO Michelle Chang stepping in as interim Chief Accounting Officer following Shane Crehan’s resignation. These developments reflect Zoom’s ongoing efforts to navigate a competitive market and address both strategic and operational aspects of its business.
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