Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com - Mizuho (NYSE:MFG) maintained its Outperform rating and $95.00 price target on Zoom Video (NASDAQ:ZM) following the company’s second-quarter results that exceeded analyst expectations. According to InvestingPro data, analysts’ targets for the stock range from $65 to $115, with the company currently trading at a P/E ratio of 21.29.
Zoom reported revenue growth of 4.7% year-over-year, surpassing the consensus estimate of 3.1%. The company also delivered an operating margin of 41.3%, significantly higher than the 38.7% consensus expectation. InvestingPro analysis shows Zoom maintains impressive gross profit margins of 76.38% and has earned a "GREAT" financial health score, indicating strong operational efficiency.
The company raised its fiscal year 2026 revenue guidance to 3.5% year-over-year growth at the midpoint, up from its previous guidance of 3.0%. This improved outlook is primarily driven by stronger enterprise growth momentum, which is expected to offset flat performance in the online segment.
Zoom’s Customer Experience offering, which combines Contact Center as a Service (CCaaS) and Zoom Virtual Agent (ZVA), now has 229 customers with annual recurring revenue exceeding $100,000, representing 94% year-over-year growth. Additionally, Zoom Phone annual recurring revenue grew in the mid-teens.
The company took a more aggressive approach to share repurchases in the second quarter, buying back $463 million in stock, which Mizuho views as a positive for shareholders. This aligns with one of several bullish InvestingPro Tips highlighting management’s aggressive share buyback strategy. Subscribers can access 10+ additional exclusive insights and a comprehensive Pro Research Report for deeper analysis of Zoom’s financial position.
In other recent news, Zoom Video has reported impressive second-quarter results, with revenue surpassing expectations by $20 million, marking its largest quarterly outperformance in several years. The company’s revenue growth was noted at 4.7% year-over-year, or 4.4% on a constant currency basis, according to RBC Capital, which subsequently raised its price target for Zoom to $100. Needham also reiterated a Buy rating with a $100 price target following these strong results. Meanwhile, Goldman Sachs maintained its Neutral rating and an $87 price target, acknowledging the company’s largest revenue beat in four quarters and a non-GAAP operating margin of 41%.
Stifel, while maintaining a Hold rating, lowered its price target to $80, citing AI growth as a key driver in Zoom’s best top-line performance in 11 quarters. The Zoom Contact Center showed significant growth, with a 94% year-over-year increase in customers generating over $100,000 in annual recurring revenue. Citizens JMP reiterated a Market Perform rating, highlighting Zoom’s non-GAAP earnings per share of $1.53, which exceeded the consensus estimate of $1.37. These developments reflect Zoom’s strong performance and the varied analyst perspectives on its future potential.
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