Zoom Faces Ongoing Macro Challenges: 6 Analysts Takeaways On Q4 Earnings

Zoom Video Communications Inc ZM shares were climbing in early trading on Tuesday, after the company reported higher-than-expected sales and earnings for the fiscal fourth quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

Goldman Sachs On Zoom Video Communications

Analyst Kash Rangan maintained a Neutral rating while raising the price target to $73.

Zoom Video Communications reported “solid” results for the fourth quarter “against relatively muted expectations,” Rangan said.

The company’s revenue came in 2% higher than the consensus, “including the Enterprise and Online segments outperforming GSe +2%, while OPM and FCFM outperformed Consensus +200 and +900 bps,” the analyst stated.

“While Zoom’s FY25 revenue guidance came in -1% below Consensus (+1.6% revenue growth), implying net new revenue (Y/Y) down -46% vs. -54% in FY24,” he added.

JPMorgan On Zoom Video Communications

Analyst Mark Murphy reiterated a Neutral rating while cutting the price target from $83 to $80.

Zoom Video’s quarterly results indicated “a persistently imperfect macro, choppiness that may reflect some of the mixed results we saw in our unique visitor web traffic data, and continued discussions of capital allocation and the potential for M&A,” Murphy wrote.

He added that the company’s FY25 revenue growth guidance came in “slightly below what we considered a relatively modest street consensus figure of 3.5% y/y.”

Wedbush On Zoom Video Communications

Analyst Taz Koujalgi reaffirmed a Neutral rating and price target of $80.

“Zoom reported a good quarter with FQ4’24 Revenues and Operating income coming in above guidance and Street expectations, but the Revenue beat was a little lighter than prior quarters,” Koujalgi wrote in a note. He added, however, that the company’s cash flow beat was very healthy and the highlight of the quarter.

“FY25E revenue guidance came in slightly below Street expectations, but the FCF guide was quite a bit ahead of Street expectations,” the analyst further stated.

Check out other analyst stock ratings.

KeyBanc Capital Markets On Zoom Video Communications

Analyst Thomas Blakey maintained a Sector Weight rating on the stock.

Zoom Video reported better-than-expected quarterly results “driven by Enterprise, which saw uptick in $100K customers in F4Q,” Blakey said.

“Zoom saw an uptick in larger deals in the quarter driven by CCaaS, which management appears excited about and with growth drivers that could accelerate growth in FY25/26,” he added.

Oppenheimer On Zoom Video Communications

Analyst George Iwanyc reiterated a Perform rating.

Zoom Video’s quarterly results showcased “encouraging new product trends (Phones/Contact Center/AI Companion),” Iwanyc said. “Steady operating execution is also driving better than expected OM (38.7%, +2.5pts YoY) and strong FCF ($332.7M),” he added.

“However, macro challenges continue to weigh on seat expansion and Enterprise NDER (101%, -4pts QoQ), and is leading to modest FY25 growth expectations (+1.6% YoY to $4.60B),” the analyst further stated.

Needham On Zoom Video Communications

Analyst Ryan Koontz reaffirmed a Hold rating on the stock.

“Management is confident that its platform R&D approach to add Contact Center and no-cost AI features” differentiates Zoom Video from Microsoft, Koontz said.

“We also see its best-in-class Rooms product as capable of making a dent in enterprise, but acknowledge we may not see a material improvement in topline growth until F26,” he added.

ZM Price Action: Shares of Zoom Video Communications had risen by 7.37% to $67.77 at the time of publication on Tuesday.

Read Next: What If The Fed Does Not Cut Rates This Year? Inflation's Stickiest Mile To 2% Target

Photo: Courtesy Unsplash