Why Are Zoom Shares Trading Lower Today?

Zoom Video Communications Inc's ZM beat on Q2 earnings but issued cautious guidance that prompted multiple price target (PT) cuts.

BTIG analyst Matt VanVliet lowered the PT to $460 from $495, implying a 32.4% upside but maintained a Buy. Zoom's Q2 results, in line with consensus, imply worse than expected second half of the year, VanVliet notes.

Piper Sandler analyst Jamesa Fish lowered the PT to $369 from $464, signifying a 6.2% upside, and maintained an Overweight. Zoom shares are down over 10% since it was the lowest upside for Zoom as a public company, Fish notes.

UBS analyst Karl Keirstead lowered the PT to $315 from $345, implying a 9.4% downside, and affirmed a Neutral. Zoom's Q2 results missed buy-side targets on nearly every metric as post-COVID churn among businesses and paying individuals ramped, Keirstead notes.

Zoom is running into the Microsoft Corp's MSFT Teams juggernaut, Keirstead adds, slashing his FY23 revenue growth estimate from 24% to 13%.

Citigroup analyst Tyler Radke reiterated a Neutral with a $380 PT, signifying a 9.4% upside. Radke expects the slowdown in customer additions in the over ten cohorts to continue. The guidance reflects the impact of the churn in the less than ten cohorts.

RBC Capital analyst Rishi Jaluria affirmed his Outperform and $450 PT, implying a 29.5% upside. Mizuho analyst Siti Panigrahi lowered the PT to $350 from $400, signifying a 0.7% upside, and reiterated a Buy.

Deutsche Bank analyst Matthew Nikam lowered the PT to $350 from $375 and maintained a Hold.

BofA analyst Daniel Bartus lowered the PT to $385 from $480, signifying a 10.8% upside, and affirmed a Buy. The comps and outlook reflect weakening trends across small businesses and consumers as in-person activities increase, Bartus notes.

Price Action: ZM shares traded lower by 12.70% at $303.30 in the premarket session on the last check Tuesday.

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