Zoom stock price target raised to $100 by RBC on solid Q2 results

Investing.com - RBC Capital raised its price target on Zoom Video (NASDAQ:ZM) to $100 from $95 while maintaining an Outperform rating following the company’s second-quarter results. According to InvestingPro data, 22 analysts have recently revised their earnings estimates upward, with the highest price target set at $115.

Zoom delivered what RBC described as "solid Q2 results," exceeding consensus expectations across all metrics. The company reported 4.7% year-over-year revenue growth, or 4.4% on a constant currency basis, supported by impressive gross profit margins of 76.4% and a strong financial health score rated as "GREAT" by InvestingPro.

This marked Zoom’s highest revenue growth in the past 11 quarters, or eight quarters when measured on a constant currency basis, according to RBC Capital.

Management raised its fiscal year 2026 guidance across all metrics, with the new targets coming in above consensus expectations. RBC noted continued traction with AI products, stable net revenue retention, and accelerating growth in customers spending over $100,000.

RBC expressed optimism about Zoom’s growth strategy moving forward, particularly highlighting the company’s Contact Center as a Service (CCaaS) business and AI capabilities, with encouraging signs of early traction in these areas.

In other recent news, Zoom Video Communications reported its fiscal second-quarter 2025 earnings, surpassing expectations. The company achieved earnings per share of $1.53, exceeding the forecast of $1.38. Revenue reached $1.22 billion, slightly above the anticipated $1.20 billion. Zoom’s non-GAAP operating margin was reported at 41.3%, surpassing the consensus estimate of 38.8% and showing improvement from the previous quarter’s 39.8%. Goldman Sachs maintained its Neutral rating on Zoom, with a price target of $87.00, following these results. Citizens JMP also reiterated a Market Perform rating, acknowledging the company’s stronger-than-expected performance. Zoom’s revenue growth of 4.7% year-over-year marked its largest revenue beat in four quarters. Additionally, the company’s free cash flow exceeded expectations by 29%. These developments highlight Zoom’s continued financial strength and operational efficiency.

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