Zoom dips as Citi lowers PT, cites concerns over 'competitive headwinds' from Teams
Zoom Video Communications (NASDAQ:ZM) shares fell on Monday as investment firm Citi cut its price target on the communications software provider, noting "competitive headwinds" from Microsoft (NASDAQ:MSFT).
Analyst Tyler Radke lowered his per-share price target to $118 from $139 on Zoom (ZM), but kept the neutral rating, noting that there should be only "modest upside" and a "limited raise" to guidance when the company reports first-quarter earnings results next week.
"During the quarter, we picked up multiple inputs that signaled intensifying competitive pressure for [Zoom] in the post COVID era, with [Microsoft] rapidly emerging as the chief rival," Radke wrote in a note to clients.
Zoom (ZM) shares fell nearly 1% to $94.13 in early trading on Monday.
A consensus of Wall Street analysts expects Zoom (ZM) to earn $0.88 per share on $1.07 billion in sales.
In addition, Radke noted that "virtually every partner" the investment firm spoke to that deals with Microsoft (MSFT) "highlighted the broad-based momentum of Teamsâ offering in collaboration and even phone replacements," noting that one partner mentioned that 80% of Cisco's (CSCO) Webex renewals were moving to Teams with "much fewer new [Zoom] deals." 
"Compared to Zoom, Teams has the advantage of driving Teams adoption through Office 365 E3/E5 upsell motion," Radke added.
Last week, investment firm Piper Sandler cut its rating and slashed the price target by almost 40% on Zoom Video Communications (ZM), citing limited potential gains from paid video and Zoom Phone, as well as "too much commercial [and] small-and-medium business exposure.