Zoom Communications (NASDAQ:ZM) Stock Keeps Buy Rating at Needham & Company LLC

Key Points

• Needham reaffirmed its Buy rating on Zoom Communications with a $130 price target, implying 35.14% upside from the previous close. The analyst consensus remains “Moderate Buy,” with an average target of $114.48.
• Zoom shares fell 3.3% to $96.20 in Thursday trading, despite the company exceeding quarterly EPS and revenue expectations and reporting 4.9% year-over-year revenue growth.
• Analyst sentiment is broadly positive, with 16 Buy ratings versus 11 Holds, although company insiders sold 71,209 shares worth approximately $6.94 million over the past three months.

Zoom Communications (NASDAQ:ZM - Get Free Report)'s stock had its "buy" rating reiterated by Needham & Company LLC in a research report issued to clients and investors on Thursday, Benzinga reports. They presently have a $130.00 price objective on the stock. Needham & Company LLC's target price would indicate a potential upside of 35.14% from the company's previous close.

Several other equities analysts also recently commented on the company. Yorkville Ives assumed coverage on Zoom Communications in a research report on Tuesday, October 6th. They set an "outperform" rating and a $120.00 target price for the company. Sanford C. Bernstein reissued a "market perform" rating and issued a $108.00 target price on shares of Zoom Communications in a research note on Wednesday, August 26th. Royal Bank Of Canada reissued an "outperform" rating and issued a $130.00 target price on shares of Zoom Communications in a research note on Wednesday. Jefferies Financial Group lowered their target price on Zoom Communications from $118.00 to $116.00 and set a "buy" rating for the company in a research note on Wednesday, August 26th. Finally, Oppenheimer raised Zoom Communications from a "market perform" rating to an "outperform" rating and set a $130.00 target price for the company in a research note on Wednesday. Sixteen research analysts have rated the stock with a Buy rating and eleven have given a Hold rating to the company's stock. Based on data from MarketBeat, Zoom Communications presently has a consensus rating of "Moderate Buy" and an average price target of $114.48.

Zoom Communications Stock Down 3.3%

Shares of ZM stock traded down $3.24 during mid-day trading on Thursday, reaching $96.20. The stock had a trading volume of 3,765,375 shares, compared to its average volume of 3,906,853. The firm's 50 day simple moving average is $96.50 and its 200 day simple moving average is $95.10. Zoom Communications has a one year low of $70.70 and a one year high of $114.74. The firm has a market cap of $28.07 billion, a PE ratio of 8.91, a P/E/G ratio of 4.50 and a beta of 1.03.

Zoom Communications (NASDAQ:ZM - Get Free Report) last announced its quarterly earnings data on Tuesday, August 25th. The company reported $1.55 EPS for the quarter, topping analysts' consensus estimates of $1.48 by $0.07. The company had revenue of $1.28 billion during the quarter, compared to the consensus estimate of $1.27 billion. Zoom Communications had a return on equity of 10.86% and a net margin of 65.19%. The company's quarterly revenue was up 4.9% on a year-over-year basis. During the same quarter last year, the company earned $1.53 EPS. Zoom Communications has set its FY 2027 guidance at 6.080-6.120 EPS and its Q3 2027 guidance at 1.460-1.480 EPS. Sell-side analysts forecast that Zoom Communications will post 4.27 earnings per share for the current fiscal year.

Insider Buying and Selling

In related news, Director Santiago Subotovsky sold 2,637 shares of Zoom Communications stock in a transaction on Monday, October 5th. The stock was sold at an average price of $93.74, for a total transaction of $247,192.38. Following the completion of the sale, the director directly owned 121,786 shares of the company's stock, valued at $11,416,219.64. The trade was a 2.12% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Herbert Raymond Mcmaster sold 3,000 shares of Zoom Communications stock in a transaction on Thursday, October 8th. The stock was sold at an average price of $94.71, for a total value of $284,130.00. Following the sale, the director directly owned 8,479 shares of the company's stock, valued at approximately $803,046.09. This trade represents a 26.13% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 71,209 shares of company stock worth $6,938,989. 8.83% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Zoom Communications

A number of institutional investors have recently made changes to their positions in the stock. Sumitomo Mitsui DS Asset Management Company Ltd grew its stake in shares of Zoom Communications by 0.4% during the third quarter. Sumitomo Mitsui DS Asset Management Company Ltd now owns 26,215 shares of the company's stock worth $2,380,000 after purchasing an additional 107 shares during the period. Fortitude Family Office LLC grew its stake in shares of Zoom Communications by 27.2% during the third quarter. Fortitude Family Office LLC now owns 533 shares of the company's stock worth $48,000 after purchasing an additional 114 shares during the period. 3Chopt Investment Partners LLC grew its stake in shares of Zoom Communications by 1.6% during the first quarter. 3Chopt Investment Partners LLC now owns 7,370 shares of the company's stock worth $592,000 after purchasing an additional 119 shares during the period. Rexford Capital Inc. grew its stake in shares of Zoom Communications by 45.7% during the first quarter. Rexford Capital Inc. now owns 389 shares of the company's stock worth $31,000 after purchasing an additional 122 shares during the period. Finally, Thurston Springer Miller Herd & Titak Inc. grew its stake in shares of Zoom Communications by 133.3% during the second quarter. Thurston Springer Miller Herd & Titak Inc. now owns 350 shares of the company's stock worth $30,000 after purchasing an additional 200 shares during the period. 66.54% of the stock is owned by institutional investors and hedge funds.

Trending Headlines about Zoom Communications

Here are the key news stories impacting Zoom Communications this week:

• Positive Sentiment: AI strategy strengthens growth narrative: Zoom unveiled a Unified Context Layer and additional AI products designed to convert meeting conversations into completed work across Zoom Workplace, customer experience, developer tools, and events. The initiatives could help expand Zoom beyond videoconferencing and create new revenue opportunities. Zoom Advances Its AI Strategy With a New Unified Context Layer
• Positive Sentiment: Analyst support remains strong: Oppenheimer upgraded Zoom to Outperform with a $130 price target after viewing its newer AI services favorably. Needham and RBC reaffirmed bullish ratings with $130 targets, while Rosenblatt and BTIG maintained Buy ratings with $130 and $125 targets, respectively. Zoom Video upgraded at Oppenheimer on AI platform traction
• Positive Sentiment: Enterprise momentum is encouraging: RBC cited enterprise growth as support for revenue reacceleration, while recent Zoomtopia commentary highlighted long-term financial targets, AI partnerships, and new services. The company’s latest reported quarter also exceeded consensus EPS and revenue expectations, with revenue up year over year.
• Neutral Sentiment: Valuation debate continues: A comparison with KANZHUN Limited (BZ) weighs which software stock offers better value, suggesting investors are assessing Zoom’s relatively low earnings multiple against its slower growth profile. Cantor Fitzgerald maintained a Neutral rating but set a $104 target. BZ or ZM: Which Is the Better Value Stock Right Now?
• Negative Sentiment: Shares underperformed the broader market: Zoom’s decline in the latest session was steeper than the overall market, indicating short-term selling pressure despite the positive AI announcements and analyst upgrades. Wells Fargo also reiterated a Hold rating, providing a more cautious counterpoint to the bullish calls. Wells Fargo Sticks to Their Hold Rating for Zoom Communications

About Zoom Communications

Zoom Communications, Inc NASDAQ: ZM is a communications technology company that provides cloud-based collaboration and customer engagement solutions. Founded in 2011 and headquartered in San Jose, California, the company is best known for Zoom Meetings, its videoconferencing platform for online meetings, webinars and virtual events.

The company's product portfolio also includes Zoom Phone, a cloud-based business phone service; Zoom Team Chat; Zoom Rooms for hybrid meeting spaces; Zoom Whiteboard; and Zoom Contact Center.