Analysts Cheer ZoomInfo's Q2 Beat, Maintain Overweight/Buy Rating

Analysts shared their appreciation for ZoomInfo Technologies Inc ZI post Q2 beat.

Credit Suisse analyst Phil Winslow maintained ZoomInfo with an Outperform and cut the price target from $100 to $80. ZoomInfo reported impressive Q2 results, he noted.

ZoomInfo revised the full year 2022 guidance to reflect revenue growth. Moreover, Winslow attributed most of the sequential uptick in inorganic revenue to the continued outperformance of Chorus and RingLead, reflecting his view that ZoomInfo is successfully leveraging its best-in-class data moat. 

Despite concerns about tightening IT budgets and elongating sales cycles across the enterprise software space, ZoomInfo's sustained cadence of quarterly beats and raises illustrate the secular importance of GTM intelligence and quick time-to-ROI of its solutions vs. other software peers. 

JMP analyst Patrick Walravens reiterated Market Perform after the company reported strong 2Q22 results leaving the stock up 11% in the aftermarket after having fallen 41% year to date versus a 21% decrease in the Nasdaq. 

ZoomInfo's strengths include that it addresses a massive TAM, is ably led by founder Henry Schuck, has the leading data asset, has a terrific financial profile with high growth and margins, and is effectively expanding its product footprint.

RBC Capital analyst Rishi Jaluria had an Outperform with a PT of $60. ZoomInfo reported a clean beat-and-raise quarter, a rare occurrence in software in the current environment, he noted. 

Management did acknowledge longer sales cycles, particularly for more significant/international deals. Still, overall sounded cheerful. Jaluria expected it to ease investors' fears around its seat-based model and exposure to VC-backed startups. 

He believes both growth and margins were better than feared, while the guide was firm but still left enough breathing room for Q4 in case macro degraded further. 

Barclays analyst Raimo Lenschow had an Overweight with a PT of $50. He thought ZI shares should react positively to this Q2 print. 

Not only did the company manage to achieve a revenue beat which is only slightly less than historical levels, but it also raised the full-year outlook and beat Street margin expectations. 

The better margins, especially, should please long only investors, as it shows that ZoomInfo can deliver both growth and operating leverage in this environment. Given the low valuation level and superior business profile, Lenschow saw a healthy upside for the shares.

Mizuho had a Buy rating and PT of $65. ZoomInfo reported another strong beat-and-raise quarter well above consensus, amidst some broader weakness in software, on solid growth in its data platform and cross-selling to its base. 

Management raised the FY22 revenue guidance, which he believes still appears conservative as management factored in a worsening macro environment. 

Despite some sales elongation, management voiced confidence in the value of their GTM platform to new and existing customers and expected to invest further in sales and R&D capacity, he noted. 

Price Action: ZI shares traded higher by 11.50% at $42.07 on the last check Tuesday.