Zoom Faces International Growth Risks Amid Macroeconomic And Tariff Headwinds: Analyst

Rosenblatt analyst Catharine Trebnick maintained a Buy rating on Zoom Communications ZM on Thursday, lowering the price forecast from $95 to $90.

Trebnick cautioned about growing macroeconomic uncertainty and potential tariff-related challenges that may hinder the company’s ability to expand revenue streams beyond the U.S. market.

The new forecast reflects a valuation of approximately 4.2 times the projected 2027 revenue, down from the previous multiple of 4.5 times.

While Zoom is trading at 3.0 times its enterprise value to estimated 2027 sales—a level consistent with the broader SaaS group average—it is growing revenue at 3% year over year, compared to the group’s 6%.

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However, the analyst notes that this valuation is still reasonable given Zoom’s strong financial footing, including a substantial $7.8 billion cash reserve and a free cash flow margin of 37%, which significantly exceeds the industry average of 26%.

Trebnick trimmed the revenue growth expectations for Zoom, now forecasting a 2.2% increase for FY26—below the company’s FY25 guidance of 2.7% at the midpoint.

For FY25, the analyst estimates revenue at $4.768 billion, reflecting 2.6% growth and slightly below both their previous estimate and the Street consensus of $4.788 billion.

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FY27 revenue is also adjusted downward to $4.935 billion, implying 3.5% growth and again falling short of the consensus estimate of $4.949 billion.

As a result of these lower projections, adjusted operating income for FY25 is revised to $1.854 billion with a margin of 38.9%, just under the Street’s forecast, Trebnick writes.

Due to reduced sales volume expectations, the analyst now projects FY26 pro forma EPS at $5.34, unchanged from their previous estimate.

Looking further ahead, with anticipated revenue growth of just 3.5% in FY27, the EPS forecast has been modestly lowered to $5.48 from $5.50, the analyst writes.

Price Action: ZM shares are trading higher by 3.16% to $75.28 at last check on Thursday.

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