Shares of Zoom Communications Inc (NASDAQ:ZM) rallied Friday after the company reported upbeat fiscal second-quarter earnings.
Here are some key analyst takeaways.
- Rosenblatt Securities analyst Catharine Trebnick reiterated a Buy rating, while raising the price target from $100 to $110.
- KeyBanc Capital Markets analyst Jackson Ader reaffirmed an Underweight rating, while reducing the price target from $73 to $69.
- RBC Capital Markets analyst Rishi Jaluria maintained an Outperform rating , while raising the price target from $95 to $100.
- Wedbush analyst Daniel Ives reiterated an Outperform rating and price target of $95.
- Needham analyst Joshua Reilly maintained a Buy rating and price target of $100.
Check out other analyst stock ratings.
Rosenblatt Securities: Zoom delivered the strongest revenue growth in 11 quarters. Its sales are up 4.7% year-on-year to $1.22 billion and pro forma earnings are $1.53 per share. Accelerating enterprise demand, rapid AI adoption, and continued Contact Center momentum drove the upbeat results, Trebnick said in a note.
Management raised their fiscal 2026 guidance for revenue, earnings, and free cash flow. This highlights both "top-line stability and industry-leading profitability," the analyst stated. The company’s Virtual Agent 2.0 product "has already secured significant deals including one with SecureOne," he added.
KeyBanc Capital Markets: Q2 results highlighted a few positives, Ader said. For example, the Enterprise and Online segments outperformed expectations.
The scrutiny that Zoom highlighted in the previous quarter was less than anticipated and management expects a more normal level of scrutiny through the rest of the year, the analyst stated. However, the company's constant currency revenue was $15 million higher than the midpoint of the second quarter guidance, while the full-year expectation was raised by only $9 million, he commented.
RBC Capital Markets: Zoom reported "solid" quarterly results, ahead of consensus "across all metrics," Jaluria said. The fiscal third-quarter guidance implies billings of $1,174 million, up around 2.4% year-on-year, which was slightly below consensus, he added.
Contact Center customers with over $100,000 in annual recurrent revenue (ARR) grew 94% year-on-year to 229, the analyst stated. "FY26 revenue, operating income, EPS, and FCF, were all raised, with all metrics coming in above street estimates," he further wrote.
Wedbush: Zoom reported "solid" beats on revenue and earnings, Ives said. Non-GAAP gross margin expanded to 79.8%, from the previous quarter's 79.2%, with the company implementing AI into its operations, he added.
Zoom seems to be on track to reach its long-term gross margin target of 80%, the analyst stated. For fiscal 2026, the company guided to total revenue $4.825-$4.835 billion and non-GAAP earnings of $5.81-$5.84 per share, higher than Street expectations of $4.807 billion and $5.61 per share, respectively, he commented.
Needham: Zoom's results indicated a reacceleration in the Enterprise segment, with a 1% sequential increase in customer count to 184,000, Reilly said. "We believe the key message for investors exiting Q2 is another quarter of stabilizing trends is a precursor to a more significant re-acceleration of revenue growth," he wrote.
Zoom is "now poised for a higher trajectory,” the analyst stated. The enterprise segment is expected to continue accelerating in the second half of the year. The guidance does not reflect a flow-through of the second-quarter beat, which is "prudent" and sets up the company for further beats in the back half of the year, he added.
Price Action: Shares of Zoom Communications had risen by 10.45% to $80.82 at the time of publication on Friday.
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