Zoom's AI Companion Free For Paid Users, While Competitors Charge $30-$50 Per Seat: Analyst Weighs In

Stifel analyst J. Parker Lane reiterated a Hold rating on Zoom Video Communications, Inc. ZM, lowering the price target to $70 from $75.

Lane writes Zoom's decision to include AI Companion at no additional cost for paid users is notable given that competitors charge $30-$50 per seat for similar offerings, the analyst highlights.

Zoom did not provide financial updates for the quarter or the full year during the Investor Q&A at the Zoomtopia conference in San Jose, including the progress of both Zoom Phone and Zoom Contact Center.

Zoom is still in the process of translating product innovation into sustainable growth, the analyst notes.

After a period of hypergrowth fueled by the pandemic, Zoom is experiencing a slowdown in revenue growth, according to the analyst.

Also Read: Zoom Ups Competition With Microsoft, Throws In AI and Google Doc Like Features In Bundled Offering

On the positive side, Zoom's AI Companion has been a focal point, with plans to integrate it across the entire Zoom One platform. This innovation could enhance user experience and increase platform stickiness - analyst highlights.

The announcement of Zoom Docs, an AI-powered workspace, could enhance collaboration and productivity within the platform, driving user engagement and retention, analyst highlights.

Benchmark analyst Matthew Harrigan reiterated a Buy rating on Zoom, with an unchanged price target of $95.

The analyst remains constructive on Zoom while not anticipating immediate stock performance gratification following the announcement of Zoom Docs at the company's Zoomtopia user conference.

There were no immediate pricing details with Zoom Docs anticipated to be available in 2024, Harrigan adds.

The offering enhances Zoom's AI-powered workspace optimized for hybrid work and complements 2022 Zoomtopia's email and calendar software introduction as features replicating Microsoft Teams by Microsoft Corporation MSFT. 

Price Action: ZM shares are trading lower by 3.34% to $65.76 on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.