Zoom Rated Strong Buy Amid Customer Growth and EPS Projections
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 24 2025
0mins
Should l Buy ZM?
Source: NASDAQ.COM
Zoom Video Communications Inc. has seen a price increase of 6.19% as it reaches a 20-day high, reflecting positive market sentiment.
The company is rated #1 (Strong Buy) by Zacks, with an estimated 8% year-over-year growth in EPS for fiscal 2026, indicating strong market demand and profitability. Additionally, Zoom has over 4,300 customers generating more than $100,000 in annual revenue, a 9.2% increase year-over-year, highlighting its growing appeal among high-value clients.
This positive outlook and customer growth position Zoom favorably in the market, suggesting continued strength in its business model and potential for further gains.
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Analyst Views on ZM
Wall Street analysts forecast ZM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ZM is 99.33 USD with a low forecast of 85.00 USD and a high forecast of 115.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
20 Analyst Rating
12 Buy
7 Hold
1 Sell
Moderate Buy
Current: 89.080
Low
85.00
Averages
99.33
High
115.00
Current: 89.080
Low
85.00
Averages
99.33
High
115.00
About ZM
Zoom Communications, Inc. provides an artificial intelligence (AI) work platform for human connection. Zoom Workplace, the Company’s AI-powered, open collaboration platform built for modern work, enables us to streamline communications, increase employee engagement, optimize in-person time, improve productivity, and offer customer choice with third-party apps and integrations. Zoom Workplace, powered by Zoom AI Companion, includes collaboration solutions like meetings, team chat, phone, scheduler, whiteboard, spaces, Workvivo, and more. Its communication products include Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom scheduler, and Zoom mail and calendar. Its productivity products include Zoom Docs, Zoom Whiteboard, Zoom Clips, and Zoom Tasks. Its space products include Zoom Rooms, Zoom Workspace Reservation, and Zoom Visitor Management. It serves various industries, including education, financial services, government, retail, manufacturing and healthcare.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Zoom Beats Earnings Estimates; Palantir and Kinsale Capital Show Strong Guidance
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- Palantir's Positive Outlook: Palantir's fourth-quarter results exceeded expectations, and the company provided first-quarter sales guidance above estimates, along with FY26 guidance that also surpassed analyst forecasts, highlighting its future growth potential.
- Kinsale Capital's Optimistic Forecast: Kinsale Capital shares rose 0.4% to close at $410.44 on Thursday, with analyst Hristian Getsov initiating coverage with an Overweight rating and a $490 price target, reflecting market confidence in its future performance.
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- Growth Drivers: Strength in Zoom Contact Center and sustained mid-teens growth in Zoom Phone, along with emerging monetization from Voice AI, are driving improving growth durability, which the analyst believes is not yet fully reflected in market expectations.
- Strong Financial Position: Zoom holds approximately $8 billion in net cash and is expected to add another $3.9 billion over the next two years, providing ample financial resources for growth-accretive M&A in adjacent areas like Voice AI and Contact Center software.
- Attractive Valuation: Currently trading at less than 10 times its free cash flow for the 2027 fiscal year, Zoom offers a significant discount compared to other non-security, cash-generative software peers, presenting a favorable risk/reward opportunity for investors.
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- Palantir's Positive Outlook: Palantir's fourth-quarter results exceeded expectations, and the company provided first-quarter sales guidance above estimates, along with FY26 guidance that also surpassed analyst forecasts, highlighting its future growth potential.
- Kinsale Capital's Optimistic Forecast: Kinsale Capital shares rose 0.4% to close at $410.44 on Thursday, with analyst Hristian Getsov initiating coverage with an Overweight rating and a $490 price target, reflecting market confidence in its future performance.
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See More
Zoom Communications Stock Poised for Rally
- Rating Upgrade: Wolfe Research upgraded Zoom's rating from peer perform to outperform, with analyst Alex Zukin setting a new price target of $115, indicating a potential 27% rally in Zoom's stock, reflecting growing market confidence in its future growth prospects.
- Growth Drivers: Strength in Zoom Contact Center and sustained mid-teens growth in Zoom Phone, along with emerging monetization from Voice AI, are driving improving growth durability, which the analyst believes is not yet fully reflected in market expectations.
- Strong Financial Position: Zoom holds approximately $8 billion in net cash and is expected to add another $3.9 billion over the next two years, providing ample financial resources for growth-accretive M&A in adjacent areas like Voice AI and Contact Center software.
- Attractive Valuation: Currently trading at less than 10 times its free cash flow for the 2027 fiscal year, Zoom offers a significant discount compared to other non-security, cash-generative software peers, presenting a favorable risk/reward opportunity for investors.
See More
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- BMO Capital Upgrades Brookfield: BMO upgrades Brookfield Asset Management from Market Perform to Outperform, citing attractive mid-teens distributable earnings growth prospects underpinned by continued fundraising momentum and fee rate resilience, showcasing the company's robust financial health.
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See More
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- Significant Customer Growth: Figma reported 1,262 customers with annual revenues exceeding $100,000 as of September 30, marking a year-over-year increase of 385, indicating a sustained market penetration in the design sector that enhances long-term growth potential.
- Strong Financial Performance: The latest quarter saw Figma's revenue rise 38% year-over-year to $274.2 million, with an annual revenue run rate surpassing $1 billion for the first time; despite an operating loss of $1.1 billion primarily due to one-time stock compensation, this reflects the company's strategic focus on heavy reinvestment.
- High Market Valuation: Currently trading at nearly 70 times projected earnings, Figma's valuation remains elevated compared to Nvidia's 25 and Amazon's 29, suggesting that despite an 80% drop from its peak, careful evaluation of future profitability and competitive positioning is essential.
- Strong Product Competitiveness: Figma's platform effectively bridges designers and developers, with 30% of high-value customers using its AI tool Figma Make weekly, underscoring the product's significance in the industry and customer retention, which may further enhance market share in the future.
See More
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- Market Shift Warning: Matthew Tuttle, CEO of Tuttle Capital Management, warns that investors may be underestimating the shift away from U.S. assets, particularly large tech firms, as Europe and other regions reduce dependence on American platforms and policies.
- Digital Sovereignty Push: Tuttle highlights a significant move towards digital sovereignty in Europe, ensuring that core systems and communications cannot be easily disabled if relations with the U.S. deteriorate, which will impact future technology procurement and investment decisions.
- Beneficiary Companies: He identifies several European companies, including OVH Groupe, IONOS, Orange, Deutsche Telekom, and Capgemini, that could benefit from this shift, indicating a market tilt towards local technology solutions.
- Strained U.S.-EU Relations: Relations between the U.S. and EU have further strained after President Trump threatened tariffs on the EU for not supporting his Greenland acquisition bid, which may intensify scrutiny on U.S. tech companies and affect investor confidence.
See More
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- Revenue Growth: GE Vernova reported fourth-quarter revenue of $10.956 billion, a 4% increase from $10.559 billion, exceeding analyst expectations of $10.213 billion, indicating stable growth in the market.
- Earnings Performance: Although the EPS of $2.79 fell short of the $3.18 estimate, the diluted GAAP EPS surged from $1.73 a year ago to $13.39, reflecting a significant improvement in the company's profitability.
- Analyst Recommendation: Bryn Talkington from Requisite Capital recommended buying GE Vernova, suggesting strong market confidence in its future performance, which may attract more investor interest in the stock.
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