Zoom Stock Gets Upgrade From KeyBanc For Platform Opportunities In A Hybrid Work World

Even with businesses reopening their offices, Zoom Video Communications Inc ZM is poised to benefit from a “future hybrid work state,” in which enterprise IT budgets will continue to prioritize video and cloud communications, according to KeyBanc Capital Markets.

The Zoom Video Communications Analyst: Steve Enders upgraded the rating for Zoom Video Communications from Sector Weight to Overweight, while maintaining the price target at $428.

The Zoom Video Communications Thesis: The recently announced acquisition of Five9 helps Zoom Video Communications transform its model to a broader communications platform, Enders said in the upgrade note.

The acquisition supports “a second leg to growth as the Company prepares to navigate a post-pandemic hybrid world,” he added.

“Our recent CIO survey suggests enterprise adoption of video platforms will continue into CY22 as businesses return to office environments with 97% of respondents maintaining or increasing their spend,” the analyst wrote. He added that CIOs expect around 40% of employees to continue working from home in the long term.

“Additionally, our KFL data, which represents Zoom's <10 employee customers (36% of FY21 rev), shows sustained adoption trends through C2Q21 with y/y growth accelerating month to month,” Enders further noted.

ZM Price Action: Shares of Zoom Video Communications had risen by 3.93% to $384.73 at the time of publication Thursday.