How are energy investors positioned?
Investing.com - KeyBanc has reduced its price target on Zoom Video (NASDAQ:ZM) to $69.00 from $73.00 while maintaining an Underweight rating on the stock. Currently trading at $73.17, InvestingPro data shows Zoom maintains impressive financial health with a "GREAT" overall score and strong fundamentals, including a robust 76.38% gross profit margin.
The firm noted several positive developments in Zoom’s recent quarter, including better-than-expected performance in both the Enterprise and Online segments. The price increase in the Online segment did not trigger significant customer churn, according to KeyBanc’s analysis. With a P/E ratio of 21.29 and steady revenue growth of 3.63%, InvestingPro analysis suggests the stock is currently trading below its Fair Value, making it one of several undervalued opportunities in the tech sector.
Enterprise performance was particularly strong, with KeyBanc highlighting that the macroeconomic scrutiny Zoom management had warned about in the first quarter did not materialize to the extent anticipated. This contributed to the company’s quarterly outperformance.
Zoom management expressed increased confidence in the demand environment, indicating that the outlook for the rest of the year assumes normal levels of scrutiny. Despite this positive commentary, KeyBanc pointed out that Zoom slightly reduced its constant currency revenue expectations for the second half of the year.
While Zoom’s constant currency revenue beat the midpoint by $15 million in the quarter and the full-year expectation was raised by $9 million, KeyBanc noted a $6 million reduction for the second half. The firm cited ongoing compression of terminal multiples across the SaaS sector as part of its rationale for lowering the price target.
In other recent news, Zoom Video reported its strongest revenue growth in 11 quarters, with Q2 FY26 sales rising 4.7% year-over-year to $1.22 billion. The company’s pro forma earnings per share reached $1.53, surpassing market expectations due to increased enterprise demand, rapid AI adoption, and momentum in its Contact Center business. Rosenblatt responded to these results by raising its price target for Zoom to $110, maintaining a Buy rating. Needham also reiterated a Buy rating with a $100 price target, highlighting a $20 million revenue beat, marking Zoom’s largest quarterly outperformance in several years. Meanwhile, Mizuho (NYSE:MFG) maintained its Outperform rating, setting a $95 target, and noted Zoom’s operating margin of 41.3%, which exceeded the 38.7% consensus expectation. Bernstein kept its Market Perform rating with an $89 target, acknowledging the company’s largest earnings beat versus the midpoint in two years. Conversely, Stifel lowered its price target to $80, maintaining a Hold rating, while recognizing Zoom’s strong top-line performance driven by AI-powered tools. The Zoom Contact Center also showed significant growth, with a 94% year-over-year increase in customers generating over $100,000 in annual recurring revenue.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.