Zoom Communications (NASDAQ:ZM) Earns "Buy" Rating from Needham & Company LLC

Key Points

• Needham reaffirmed its “Buy” rating on Zoom Communications and set a $130 price target, implying 28.81% upside from the prior close.
• Zoom exceeded quarterly expectations with adjusted EPS of $1.55 and revenue of $1.28 billion, while revenue grew 4.9% year over year. Management raised fiscal 2027 adjusted EPS guidance to $6.08–$6.12.
• Analyst sentiment is moderately positive, with 16 Buy ratings and 12 Holds and a consensus target of $111.55, although some analysts remain cautious about slowing growth, competition and weaker-than-expected near-term profit guidance.

Zoom Communications (NASDAQ:ZM - Get Free Report)'s stock had its "buy" rating restated by analysts at Needham & Company LLC in a research report issued on Wednesday,Benzinga reports. They currently have a $130.00 price target on the stock. Needham & Company LLC's price target indicates a potential upside of 28.81% from the stock's previous close.

A number of other research analysts have also weighed in on ZM. UBS Group boosted their target price on Zoom Communications from $105.00 to $115.00 and gave the stock a "neutral" rating in a report on Thursday, August 20th. Mizuho raised their price target on Zoom Communications from $100.00 to $120.00 and gave the company an "outperform" rating in a report on Friday, May 22nd. Wells Fargo & Company lifted their price objective on shares of Zoom Communications from $90.00 to $105.00 and gave the stock an "equal weight" rating in a research report on Friday, May 22nd. Citigroup upped their price objective on shares of Zoom Communications from $122.00 to $126.00 and gave the company a "buy" rating in a report on Tuesday, May 26th. Finally, Cantor Fitzgerald reissued a "neutral" rating and issued a $104.00 price objective on shares of Zoom Communications in a research report on Monday. Sixteen research analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $111.55.

Zoom Communications Stock Performance

Shares of NASDAQ:ZM opened at $100.92 on Wednesday. Zoom Communications has a 52-week low of $70.70 and a 52-week high of $114.74. The company has a market capitalization of $29.59 billion, a P/E ratio of 14.82, a price-to-earnings-growth ratio of 5.53 and a beta of 1.00. The company has a 50-day simple moving average of $94.00 and a 200 day simple moving average of $91.30.

Zoom Communications (NASDAQ:ZM - Get Free Report) last released its quarterly earnings data on Tuesday, August 25th. The company reported $1.55 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.48 by $0.07. The firm had revenue of $1.28 billion for the quarter, compared to analyst estimates of $1.27 billion. Zoom Communications had a return on equity of 11.87% and a net margin of 41.99%.The business's revenue for the quarter was up 4.9% compared to the same quarter last year. During the same quarter in the prior year, the company earned $1.53 earnings per share. 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. As a group, equities analysts forecast that Zoom Communications will post 4.21 earnings per share for the current year.

Insider Transactions at Zoom Communications

In related news, CEO Eric S. Yuan sold 12,100 shares of the business's stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $100.17, for a total value of $1,212,057.00. Following the completion of the sale, the chief executive officer directly owned 22,998 shares in the company, valued at $2,303,709.66. The trade was a 34.47% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Michelle Chang sold 8,489 shares of the company's stock in a transaction on Friday, July 10th. The shares were sold at an average price of $90.80, for a total value of $770,801.20. Following the completion of the transaction, the chief financial officer directly owned 35,452 shares in the company, valued at approximately $3,219,041.60. This represents a 19.32% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 56,155 shares of company stock worth $5,654,761 in the last ninety days. 8.83% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Zoom Communications

Several institutional investors and hedge funds have recently modified their holdings of the business. California State Teachers Retirement System raised its stake in Zoom Communications by 8,620.6% in the 2nd quarter. California State Teachers Retirement System now owns 31,999,864 shares of the company's stock worth $2,761,908,000 after purchasing an additional 31,632,917 shares in the last quarter. Vanguard Group Inc. grew its position in shares of Zoom Communications by 4.0% during the 4th quarter. Vanguard Group Inc. now owns 26,967,224 shares of the company's stock worth $2,327,002,000 after purchasing an additional 1,029,623 shares in the last quarter. AQR Capital Management LLC increased its holdings in shares of Zoom Communications by 43.9% during the fourth quarter. AQR Capital Management LLC now owns 12,195,243 shares of the company's stock worth $1,052,328,000 after purchasing an additional 3,718,186 shares during the period. State Street Corp boosted its stake in shares of Zoom Communications by 5.0% in the fourth quarter. State Street Corp now owns 7,582,924 shares of the company's stock valued at $654,331,000 after buying an additional 363,776 shares during the period. Finally, Norges Bank bought a new stake in shares of Zoom Communications in the fourth quarter valued at approximately $509,788,000. 66.54% of the stock is currently 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: Zoom reported adjusted earnings of $1.55 per share and revenue of $1.28 billion, exceeding analyst estimates of $1.48 and $1.27 billion, respectively. Revenue increased 4.9% year over year, while enterprise revenue rose 7.8% to $787.5 million. Zoom Communications Reports Financial Results
• Positive Sentiment: Management raised fiscal 2027 adjusted EPS guidance to $6.08-$6.12, above the roughly $5.71 consensus cited in company updates. AI-powered deals, record contact-center bookings and larger enterprise wins were highlighted as drivers of future growth. Zoom Q2 2027 Earnings Call Highlights
• Neutral Sentiment: Analyst opinion remains divided. BTIG reaffirmed a Buy rating with a $125 price target, while Cantor Fitzgerald maintained a Neutral rating with a $104 target, reflecting uncertainty over the pace of Zoom’s growth and AI monetization. BTIG Buy Rating
• Negative Sentiment: Zoom’s third-quarter profit outlook came in below Wall Street expectations, despite revenue guidance near consensus. The forecast suggests that competition is pressuring margins and that AI investments have not yet produced enough incremental growth to satisfy investors. Zoom Forecasts Quarterly Profit Below Estimates
• Negative Sentiment: The earnings beat was relatively modest, with revenue growth remaining in the mid-single digits and online growth described as tempered. Reports characterized the outlook as flat or soft, causing the near-term guidance to overshadow the quarter’s better-than-expected results. Zoom’s Soft Q3 Guidance Overshadows Q2 Double Beat

About Zoom Communications

Zoom Video Communications, Inc (commonly referred to as Zoom) is a provider of cloud-based communications and collaboration solutions. The company's platform supports video conferencing, voice calling, instant messaging, webinars and large-scale virtual events, and meeting room systems, marketed to businesses, educational institutions, government organizations and individual users. Zoom's product lineup includes Zoom Meetings, Zoom Phone, Zoom Rooms, Zoom Video Webinars and Zoom Chat, and the company offers integrations and extensions through a developer marketplace and third-party apps.

Founded in 2011 by Eric S.

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