UBS Reiterates Neutral Rating on Zoom Video (ZM) Following Earnings

UBS analyst Taylor McGinnis reiterated a Neutral rating and $115.00 price target on Zoom Video (NASDAQ: ZM).

The analyst commented, "While Enterprise revs growth accelerated ~1pt to 8% Y/Y, the upside was largely offset by weaker-than-expected Online performance, with growth decelerating from 3% Y/Y in 1Q to ~1% Y/Y in 2Q. ZM attributed the slowdown to softer top-of-funnel activity. As a result, ZM effectively reiterated its ~4% C/C 2HF27 revs outlook, as stronger Enterprise trends and the contribution from the Common Room acquisition are expected to be offset by a weaker Online trajectory, with ZM now forecasting flattish Online growth in 2H (vs up slightly prior). In our view, the reduced Online outlook implies the 2H revs guide could otherwise have been raised by roughly $10-20M on the back of Enterprise strength and Common Room. While Online disappointed, ZM partially offset this by raising its FY27 FCF outlook by approximately $80M to ~$1.8B, including roughly $40M from extending the useful life of assets in one data center by 2 years. We continue to view Enterprise execution positively; however, absent evidence of a more meaningful inflection in overall growth >5%, we maintain our Neutral rating, with shares trading at ~11x CY27E EV/FCF (adjusted for the reported $3.13B value of its Anthropic stake)."

For an analyst ratings summary and ratings history on Zoom Video click here. For more ratings news on Zoom Video click here.

Shares of Zoom Video closed at $100.92 yesterday.

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