Zoom gets new buy rating from MKM on 'key catalysts' ahead
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Zoom Video Communications shares remained near their breakeven point Thursday as MKM Partners analyst Catharine Trebnick started coverage of the video technology company with a buy rating due to several "key catalysts" in the months ahead.
Trebnick said she expects Zoom (NASDAQ:ZM) to see growth speeding up due to new products such as Zoom Rooms, Zoom Contact Center and Zoom Chat. Trebnick said that selling such products to larger enterprise customers should help Zoom (ZM) get back to year-over-year revenue growth of 20%, while the company previously forecast growth of 10.5% to 11% for its 2023 fiscal year.
According to Trebnick, Zoom's (ZM) slower growth outlook has "created more attractive entry points for investors." Zoom (ZM) was one of the biggest beneficiaries of the work-from-home boom immediately after the COVID-19 pandemic started, and Wall Street rallied behind the company's shares for more than a year. However, as corporate budgets have started getting trimmed, and some employees have begun returning to the office, Zoom (ZM) has seen its stock price fall more than 16% this year, to around $99 a share on Thursday.
But, Trebnick set a $135-a-share price target on Zoom's (ZM) stock, and highlighted what she said was the company's "ability to get its foot in the door and grow its relationship with the customers, and the more products it has, the more opportunities it creates."
Wall Street analysts have a consensus buy rating on Zoom's (ZM) stock, while Seeking Alpha authors have a hold rating on Zoom (ZM). Meanwhile, Seeking Alpha's quant system, which consistently beats the market, has a consensus hold rating on Zoom's shares.