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Investing.com - Piper Sandler has reiterated its Neutral rating and $85.00 price target on Zoom Video (NASDAQ:ZM) following the company’s recent earnings report. According to InvestingPro data, Zoom currently trades at $73.17 and shows strong financial health with a "GREAT" overall rating, suggesting potential upside from current levels.
The video communications company delivered larger-than-expected quarterly results, primarily driven by strength in its Commercial segment, prompting shares to rise in after-hours trading. With impressive gross margins of 76.4% and annual revenue of $4.75 billion, Zoom also raised its fiscal year 2026 guidance, which Piper Sandler described as still appearing conservative while implying acceleration for the year.
Piper Sandler noted several positive developments, including reduced scrutiny of large deals compared to the previous quarter and an increase in customers spending over $100,000 across growth product families like Workvivo and CX.
The research firm acknowledged several tailwinds for Zoom, including increasing cross-selling opportunities, consolidation of its Communications suite, continued upmarket expansion, and stability in its Online segment.
Despite these positive factors, Piper Sandler maintained its Neutral stance, noting that Zoom’s business remains "too dependent on Workplace (video)" to significantly change its valuation range, and would require a catalyst to "accelerate growth meaningfully." For deeper insights into Zoom’s valuation and growth potential, including 10+ additional ProTips and comprehensive financial analysis, check out the full research report on InvestingPro.
In other recent news, Zoom Video reported its strongest revenue growth in 11 quarters, with second-quarter fiscal year 2026 sales increasing 4.7% year-over-year to $1.22 billion. The company’s pro forma earnings per share reached $1.53, surpassing market expectations, fueled by accelerating enterprise demand and rapid AI adoption. Mizuho (NYSE:MFG) noted that Zoom’s revenue growth exceeded the consensus estimate of 3.1%, and the company delivered an operating margin of 41.3%, which was notably higher than the expected 38.7%. Additionally, Needham highlighted a revenue beat of $20 million, marking Zoom’s largest quarterly outperformance in several years.
Rosenblatt raised its price target for Zoom to $110, maintaining a Buy rating due to the company’s impressive quarterly results. Meanwhile, KeyBanc adjusted its price target to $69, citing mixed outlooks, but acknowledged positive developments in Zoom’s Enterprise and Online segments. Bernstein maintained its Market Perform rating with a price target of $89, following Zoom’s steady second-quarter performance. Mizuho reiterated an Outperform rating with a $95 target, and Needham also maintained a Buy rating with a $100 target, reflecting continued confidence in Zoom’s growth trajectory.
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