6 Zoom Analysts Offer Key Takeaways After Stock Plummets On Heels Of Q3 Earnings

Shares of Zoom Video Communications Inc ZM nosedived on Monday, after the company reported its quarterly results.

Analyst Meta Marshall maintained an Equal-Weight rating, while reducing its price target from $90 to $85.
Zoom Video’s quarterly results were “better than feared due to upside in Online while Enterprise was in-line,” Marshall said in a note. “Value remains, but with macro acting as a headwind to growth in NT, negative sentiment unlikely to lift."

Analyst Matthew Harrigan reiterated a Buy rating, while reducing the price target from $118 to $102.
Zoom Video guided to below-consensus sales for the fiscal fourth quarter, and management warned of modest fiscal 2024 growth, Harrigan said.
“The stock is now off 9% pre-market in reaction to the guidance moderation despite solid 3QF23 sales even with online and FX headwinds,” the analyst wrote. “We have now emerged as a “defender of the faith” on Zoom’s long-term UCaaS growth potential after having been one of a very few select Holds until the March 2022 market nadir."

Analyst Siti Panigrahi reaffirmed a Buy rating, while reducing the price target from $120 to $100.
“Zoom reported a solid FQ3 but disappointing FQ4 guidance due to the worsening macro environment (FX has created a $14M headwind alone),” Panigrahi stated.
“In addition, management noted longer sales cycles and more scrutiny around deals, which has pressured growth in the enterprise segment,” he said. “We believe that the worsening macro will continue to weigh on the company's growth over the near-term."

Analyst Rishi Jaluria maintained an Outperform rating, with a price target of $110.
Zoom Video’s overall results were disappointing, “with F3Q above consensus but another (slight) guide down on FY23 revenue,” Jaluria mentioned.
“Management seemed to soft guide to low-to-mid single digit growth in FY24,” the analyst said. “Online revenue decelerated again, with soft conversion more than offsetting improving churn; and Enterprise decelerated slightly in F3Q and is expected to again in F4Q based on guidance."

Analyst George Iwanyc reiterated a Perform rating on the stock.
“Zoom reported slightly better-than-expected 3QFY23 revenue supported by continued strength in its Enterprise business,” Iwanyc wrote. “We're encouraged to see the steady progress and expect more gains, especially in FY24 as Zoom One and the platform selling motion matures."
“However, Zoom also continues to see YoY declines in its Online business (-9% YoY) and more near-term pressure's expected given ongoing FX/macro headwinds (reflected in 4QFY22 guidance below expectations)."

Analyst Ryan Koontz reaffirmed a Hold rating.
"We adjust our F4Q estimates to match guidance,” Koontz said. “We reduced our F24 revenue estimate following the Nov. 8 analyst day and leave it unchanged (+7% y/y),” he said.
“We maintain our Hold rating pending increased confidence in stabilized online sales and a material contribution to revenue from new enterprise products,” he added.

ZOOM Price Action: Shares of Zoom Video Communications had declined by 7.17% to $74.51 at the time of publication Tuesday.

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