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Mizuho Securities has adjusted its outlook on ZoomInfo Technologies (NASDAQ: ZI), reducing the price target to $9 from the previous $14 while maintaining a neutral rating on the company's stock.
This adjustment on Tuesday follows ZoomInfo's second-quarter earnings report, which fell short of expectations, prompting a downward revision of the company's full-year revenue forecast.
ZoomInfo reported quarterly revenue of $291.5 million, which did not meet the consensus estimate of $308 million. The company also revised its full-year revenue guidance downward by approximately 5%, attributing half of this decrease to updated projections on the collectability of previously recognized revenue, particularly from small and medium-sized businesses (SMBs).
The company concurrently announced changes to its Board of Directors and a transition in the Chief Financial Officer (CFO) role alongside the earnings release. Despite these corporate adjustments, ZoomInfo highlighted some positive aspects, such as stabilizing net revenue retention (NRR), growth in its enterprise business, and the monetization of its Copilot feature.
Meanwhile, RBC Capital recently reduced ZoomInfo's price target to $7.00, maintaining an Underperform rating. Jefferies and Stifel also lowered their price targets to $18.00 and $16.00 respectively, but maintained a Buy rating.
KeyBanc downgraded ZoomInfo from Overweight to Sector Weight due to execution and valuation issues, while Raymond James downgraded the stock from Outperform to Market Perform due to weak Q2 results and concerns over future growth.
InvestingPro Insights
Recent data from InvestingPro provides a deeper insight into ZoomInfo Technologies' (NASDAQ:ZI) current financial health and market performance. With a market capitalization of $3.66 billion and a high price-to-earnings (P/E) ratio of 49.2, reflecting investor expectations for future earnings growth, ZoomInfo's valuation appears to be optimistic. The company's gross profit margin remains impressive at 88.96% over the last twelve months as of Q1 2024, indicating strong profitability in its operations.
However, the stock's recent performance has been concerning, with a significant price drop of over 15% in the past week, and a decline of more than 20% in the past month. ZoomInfo is also trading near its 52-week low, which could signal a potential buying opportunity for value-seeking investors, as noted in two InvestingPro Tips: the stock has taken a big hit recently, and it is trading near its 52-week low. For those interested in further analysis and additional tips, there are 19 more insights available on InvestingPro for ZoomInfo Technologies.
Moreover, the company is expected to grow its net income this year, and its liquid assets exceed short-term obligations, suggesting a solid liquidity position. These financial metrics and InvestingPro Tips could help investors understand the risks and opportunities associated with ZoomInfo's stock in light of the recent earnings report and revised forecasts.
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