5 ZoomInfo Technologies Analysts On Renewal Down-Sells Impacting Q2 Print, Outlook

Shares of ZoomInfo Technologies Inc ZI tanked in early trading on Tuesday, after the company reported mixed second-quarter (Q2) earnings report and weak guidance.

The results came amid an exciting earnings season.

Here are some key analyst takeaways from the earnings release.

• Piper Sandler analyst Brent Bracelin maintained an Overweight rating, while reducing the price target from $30 to $26.
• Mizuho Securities analyst Siti Panigrahi reiterated a Buy rating, while cutting the price target from $36 to $30.
• Truist Securities analyst Terry Tillman reaffirmed a Hold rating, while reducing the price target from $26 to $24.
• Needham analyst Joshua Reilly maintained a Buy rating and price target of $35.
• JMP Securities analyst Patrick Walravens reiterated a Market Perform rating on the stock.

Check out other analyst stock ratings.

Piper Sandler: “The $2.5M revenue shortfall during Q2 and guide down suggest outsized exposure to software (35% of sales vs. 40% last year) remains a near-term overhang,” Bracelin said.

Guidance for the back half of 2023 implies further moderation in growth on weaker software renewals, he added.

“Despite healthy 20%+ growth rates outside of software, ZI shares are likely to remain volatile into year-end until demand trends begin to stabilize in 2024,” the analyst wrote.

Mizuho Securities: ZoomInfo reported “disappointing” Q2 results with “a slight revenue miss,” Panigrahi said. It also announced softer-than-expected guidance for the third quarter and lowered its outlook for 2023.
“With the Q3 and implied Q4 revenue guidance suggesting flat sequential growth through year-end, we believe ZI's guidance is now fairly de risked, positioning the company to beat & raise if the software segment stabilizes,” the analyst further stated.

Truist Securities: Management lowered their 2023 guidance “by a step function as software customer down-selling on renewals accelerated in June,” Tillman wrote. “Guidance assumes a continued degradation in demand, potentially bottoming in 4Q23/1Q24,” he added.

“Weakness which began in June is emanating from mid-market software customers who are less reliant on going after new logos than SMB customers but seeing less stability than large enterprise customers,” the analyst explained.

Needham: "ZoomInfo reported results with revenue slightly below our estimates, which was in-line with guidance, but more significantly cut full year revenue guidance by $50mm at the mid-point for the year as renewals have become increasingly challenging with software vertical customers,” Reilly said.

“We expected renewals to be challenging in the 2H, but we expected more challenges with multi-year deals vs annual agreements already renewed last year at lower levels, and the magnitude of the incremental cut is beyond our expectations,” he added.

JMP Securities: The Vancouver, Washington-based company reported disappointing quarterly results and weak guidance, Walravens said.

He added, however, that the company has positives like “the broadest sales and marketing technology stack, the largest B2B (business to business) contact and company database, and the biggest customer base.

ZI Price Action: Shares of ZoomInfo Technologies had declined by 26.73% to $18.74 at the time of publication Tuesday.