Zoom's Valuation Adjusted Lower by Morgan Stanley Analyst

Morgan Stanley's Meta Marshall lowered their price target on Zoom (NASDAQ: ZM) by 5.6% from $72 to $68 on June 14, 2024. The analyst maintained their Hold rating on the stock.

According to Marshall, the decrease in the price target reflects an updated mark-to-market multiple. The analyst noted that Zoom's multiple is now lower than its peers and is "more in line with communication software names." This adjustment suggests that Marshall believes Zoom's valuation should be adjusted to better align with similar companies in the industry.

In addition to the rating change for Zoom, Marshall also made adjustments to other stocks in their portfolio. The price target on Twilio Inc was lowered by 14.3% from $70 to $60, and the stock was downgraded from Strong Buy to Hold. Marshall also lowered the price target on 8x8 Inc by 33.3% from $3 to $2, and downgraded the stock from Hold to Strong Sell. Furthermore, the price target on Bandwidth Inc was lowered by 16.7% from $18 to $15, and the stock was downgraded from Hold to Strong Sell.

Currently, 25% of top-rated analysts recommend Zoom as a Strong Buy or Buy, while 62.5% see it as a Hold. On the other hand, 12.5% either recommend or strongly recommend selling the stock. These ratings provide a glimpse into the sentiment surrounding Zoom among industry experts.

Analysts' consensus forecast for Zoom's upcoming year suggests earnings per share (EPS) of $2.73. If these projections hold true, Zoom's next yearly EPS will experience a 1.6% decline on a year-over-year basis. This forecast indicates a potential decrease in profitability for the company in the coming year.

Zoom's stock price has seen a decline of 6.8% since its last quarterly report on April 30, 2024. Looking at a year-over-year comparison, the stock is down 19.3%. During this period, Zoom has been trailing behind the performance of the S&P 500, which has experienced a decline of 24.7%.

Meta Marshall, the Morgan Stanley analyst responsible for the rating change, is ranked in the top 5% of Wall Street analysts by WallStreetZen. With an average return of 16% and a 63.2% win rate, Marshall specializes in various sectors, including Consumer Cyclical and Industrials.

Zoom Video Communications, Inc. provides a unified communications platform across multiple regions globally. The company's offerings include Zoom Meetings, Zoom Phone, Zoom Chat, Zoom Rooms, and Zoom Developer Platform, among others. Zoom serves a wide range of industries, including education, entertainment/media, finance, government, healthcare, manufacturing, retail, and software/Internet.

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