Benchmark, a financial analysis firm, upgraded the price target for Zoom Video (NASDAQ:ZM), lifting it to $85.00 from the previous $83.00 while maintaining a Buy rating. This adjustment follows the recent financial session at Zoomtopia, where Zoom Video Communications (NASDAQ:ZM), Inc. presented revised long-term sustainable margin assessments.
The company's financial event highlighted the strategic direction and innovation trajectory, particularly in artificial intelligence (AI). Zoom's CEO, Eric Yuan, delivered a keynote speech emphasizing the company's rapid innovation through an AI-first platform and cloud services, which contrast with the slower pace of competitors still reliant on outdated methods.
Zoom announced a series of new AI-related products, showcasing its integrated AI approach. These products include AI Companion 2.0, Customer AI Companion as a paid add-on, and specialized solutions for various sectors such as Zoom Workplace for Frontline (NYSE:FRO) Workers, Healthcare with an AI add-on, and Education with an AI add-on. These developments are aimed at enhancing customer experience, marketing, and sales efforts through advanced AI capabilities.
The company introduced its new CFO, Michelle Chang, who brings experience from Microsoft (NASDAQ:MSFT) as the former VP and CFO of Modern Workplace and Cyber Security. She succeeds Kelly Steckelberg, who was noted for her significant contributions to the company. The leadership change is part of Zoom's ongoing efforts to strengthen its financial and strategic position in a highly competitive market.
Zoom Video Communications reported Q2 2025 earnings and revenue that exceeded expectations, with non-GAAP income from operations reaching $456 million and total revenue amounting to $1.16 billion. This led to a revision of the full-year revenue outlook to between $4.63 billion and $4.64 billion, with non-GAAP earnings per share projected to be between $5.29 and $5.32.
Financial services firm Stifel raised its price target for Zoom to $70.00, while maintaining a Hold rating. Baird reaffirmed its positive stance on Zoom, maintaining an Outperform rating with a $77.00 price target. Mizuho reiterated its Outperform rating and $90.00 price target for Zoom. RBC Capital Markets maintained their Outperform rating on Zoom with a steady price target of $95.00. BTIG maintained a Neutral rating on shares of Zoom Video.
Zoom appointed Michelle Chang, formerly of Microsoft, as its new Chief Financial Officer. The company has introduced new features and products aimed at improving compliance and security, including Zoom Compliance Manager Plus, Meeting Survivability, and Zoom Mesh for Meetings. The company formed a partnership with Mitel to provide a hybrid cloud solution, expected to be available in the first half of 2025.
InvestingPro Insights
Zoom Video Communications' recent strategic moves and product innovations align well with its strong financial position, as highlighted by InvestingPro data. The company's impressive gross profit margin of 75.89% for the last twelve months as of Q2 2025 underscores its efficiency in delivering its services, which is crucial for sustaining its AI-driven growth strategy.
InvestingPro Tips reveal that Zoom holds more cash than debt on its balance sheet, providing financial flexibility to invest in AI innovations and new product development. This solid financial footing is further supported by the fact that 28 analysts have revised their earnings upwards for the upcoming period, suggesting confidence in Zoom's future performance.
The company's recent stock performance is also noteworthy, with a strong return of 24.95% over the last three months. This aligns with Zoom trading near its 52-week high, reflecting positive market sentiment towards its strategic direction and AI-focused initiatives.
For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Zoom Video Communications, providing deeper insights into the company's financial health and market position.
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