Why Are Zoom Shares Trading Higher Today?

  • JPMorgan analyst Sterling Auty upgraded Zoom Video Communications Inc ZM to Overweight from Neutral with an unchanged price target of $385, implying a 40.1% upside. 
  • The stock has fallen over 33% since December 9, 2020, as investors have factored in the growth slowdown post the pandemic tailwinds, Auty notes. 
  • He believes Zoom's growth will bottom in Q4 and that the market has priced that into the current stock price, creating a "more attractive" risk/reward profile. 
  • Auty expects Zoom to be the "other big winner" in the enterprise unified communications as a service market and Microsoft Corp MSFT Microsoft Teams.
  • Price Action: ZM shares traded higher by 2.99% at $283 in the premarket session on the last check Friday.
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