Rosenblatt raises Zoom Video stock price target to $110 on strong growth

Published 22/08/2025, 13:14
Rosenblatt raises Zoom Video stock price target to $110 on strong growth

Investing.com - Rosenblatt raised its price target on Zoom Video (NASDAQ:ZM) to $110.00 from $100.00 on Friday, maintaining a Buy rating following the company’s impressive quarterly results. According to InvestingPro analysis, Zoom appears undervalued, with analysts’ consensus showing further upside potential.

Zoom reported its strongest revenue growth in 11 quarters, with Q2 FY26 sales increasing 4.7% year-over-year to $1.22 billion. The company’s pro forma earnings per share reached $1.53, exceeding market expectations, driven by accelerating enterprise demand, rapid AI adoption, and continued momentum in its Contact Center business. The company maintains impressive gross profit margins of 76.4%, reflecting operational efficiency.

Enterprise revenues grew 7% year-over-year and now represent 60% of Zoom’s revenue mix. Customers with annual recurring revenue exceeding $100,000 increased 9% year-over-year, demonstrating the company’s successful expansion into larger accounts.

Management raised its full-year FY26 guidance across revenue, pro forma earnings per share, and free cash flow. The company maintains industry-leading profitability with 41% operating margin and 80% gross margin.

Zoom holds a strong cash balance of $7.8 billion and continues its share repurchase program. With a current ratio of 4.45 and negligible debt, the company maintains exceptional financial flexibility. Rosenblatt identified Zoomtopia in September as the next key catalyst for the stock.

In other recent news, Zoom Video reported its fiscal second-quarter 2026 earnings, surpassing analyst expectations. The company achieved a 4.7% year-over-year revenue growth, exceeding the consensus estimate of 3.1%, with an operating margin of 41.3%, notably higher than the expected 38.7%. Zoom’s earnings report marked its largest earnings beat versus mid-point in two years, with a constant currency growth rate of 4.4% year-over-year. The company also outperformed expectations by $20 million in revenue, representing 170 basis points above projections.

Several analyst firms have reacted to Zoom’s performance. Bernstein maintained a Market Perform rating with an $89 price target, while Mizuho (NYSE:MFG) reiterated an Outperform rating with a $95 target. Needham continues to support a Buy rating with a $100 price target, highlighting the strong quarterly results. Stifel, however, lowered its price target to $80 from $85, maintaining a Hold rating, citing Zoom’s best top-line performance in 11 quarters, driven by AI-powered tools. Meanwhile, RBC Capital raised its price target to $100, maintaining an Outperform rating, acknowledging the solid Q2 results.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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