Zoom Communications (NASDAQ:ZM) Shares Gap Down After Analyst Downgrade

Zoom Communications, Inc. (NASDAQ:ZM) shares gapped down before the market opened on Thursday after BTIG Research lowered their price target on the stock from $105.00 to $100.00. The stock had previously closed at $85.43, but opened at $79.00. BTIG Research currently has a buy rating on the stock. Zoom Communications shares last traded at $74.4240, with a volume of 3,295,743 shares traded.

Several other brokerages have also recently issued reports on ZM. Wolfe Research upgraded shares of Zoom Communications from a “peer perform” rating to an “outperform” rating and set a $115.00 target price on the stock in a report on Thursday, February 5th. Cantor Fitzgerald reiterated a “neutral” rating and issued a $87.00 target price on shares of Zoom Communications in a research note on Tuesday, November 25th. Benchmark decreased their price objective on Zoom Communications from $115.00 to $110.00 and set a “buy” rating for the company in a report on Tuesday. Needham & Company LLC reiterated a “buy” rating and issued a $100.00 target price on shares of Zoom Communications in a research note on Tuesday, November 25th. Finally, Zacks Research lowered shares of Zoom Communications from a “strong-buy” rating to a “hold” rating in a research note on Friday, February 13th. Fourteen research analysts have rated the stock with a Buy rating, twelve have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus target price of $95.41.

Insider Activity

In related news, insider Velchamy Sankarlingam sold 7,568 shares of the firm’s stock in a transaction dated Monday, January 12th. The shares were sold at an average price of $86.55, for a total value of $655,010.40. Following the transaction, the insider directly owned 136,182 shares of the company’s stock, valued at approximately $11,786,552.10. This trade represents a 5.26% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, CEO Eric S. Yuan sold 73,378 shares of Zoom Communications stock in a transaction dated Tuesday, December 16th. The stock was sold at an average price of $87.29, for a total value of $6,405,165.62. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders have sold 183,089 shares of company stock worth $15,751,383. Company insiders own 11.51% of the company’s stock.

Key Stories Impacting Zoom Communications

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

• Positive Sentiment: Completed $2.7 billion share-repurchase program, which reduces float and supports EPS and valuation; this corporate action is a clear buyback tailwind for shareholders. Read More.
• Positive Sentiment: Launched Zoom Virtual Agent 3.0 — an upgraded AI customer‑service automation product that can drive enterprise upsells and deepen stickiness of Zoom’s platform. Read More.
• Positive Sentiment: Reported revenue above Street estimates and continued enterprise revenue growth (Q4 total revenue ~$1.25B; enterprise revenue up ~7% YoY), showing demand resilience in higher‑value customers. Read More.
• Positive Sentiment: Rosenblatt reaffirmed a “buy” rating with a $115 price target, signaling some analysts see significant upside from current levels. Read More.
• Neutral Sentiment: Citizens Jmp reiterated a “market perform” rating, reflecting mixed analyst views on near‑term growth vs. longer‑term opportunity. Read More.
• Neutral Sentiment: Full Q4 earnings materials and call transcript are available for deeper inspection — useful for investors who want detail on customer cohorts, margins and guidance assumptions. Read More.
• Negative Sentiment: Non‑GAAP EPS missed consensus (reported $1.44 vs. ~$1.48 expected) and some headlines flagged weaker profit guidance, which pressured sentiment after the print. Read More.
• Negative Sentiment: Management warned about margin/earnings pressure from intense competition (Microsoft Teams, Google Meet) and slower consumer demand, a structural headwind that may constrain growth and multiples. Read More.
• Negative Sentiment: Market reaction was negative (shares fell notably after the report), reflecting investor concern that the near‑term profitability/growth trajectory is weaker than hoped despite longer‑term AI and buyback positives. Read More.

Institutional Investors Weigh In On Zoom Communications

A number of large investors have recently modified their holdings of ZM. Candriam S.C.A. increased its holdings in shares of Zoom Communications by 49.4% in the second quarter. Candriam S.C.A. now owns 16,560 shares of the company’s stock valued at $1,291,000 after purchasing an additional 5,477 shares during the period. LSV Asset Management increased its holdings in Zoom Communications by 5.0% in the third quarter. LSV Asset Management now owns 1,069,440 shares of the company’s stock valued at $88,229,000 after buying an additional 50,579 shares in the last quarter. Catalyst Funds Management Pty Ltd purchased a new position in Zoom Communications in the 2nd quarter valued at approximately $1,248,000. Krilogy Financial LLC acquired a new position in Zoom Communications during the third quarter worth $1,963,000. Finally, Shelton Capital Management raised its holdings in Zoom Communications by 519.3% during the second quarter. Shelton Capital Management now owns 215,500 shares of the company’s stock worth $16,805,000 after purchasing an additional 180,700 shares during the last quarter. Hedge funds and other institutional investors own 66.54% of the company’s stock.

Zoom Communications Price Performance

The company has a market capitalization of $22.39 billion, a PE ratio of 14.71, a P/E/G ratio of 7.84 and a beta of 0.90. The stock has a 50-day simple moving average of $88.22 and a 200 day simple moving average of $84.43.

Zoom Communications (NASDAQ:ZM) last issued its quarterly earnings data on Monday, November 24th. The company reported $1.52 earnings per share for the quarter, topping analysts’ consensus estimates of $1.44 by $0.08. The business had revenue of $1.23 billion during the quarter, compared to analysts’ expectations of $1.21 billion. Zoom Communications had a net margin of 33.17% and a return on equity of 12.20%. The company’s revenue was up 4.4% on a year-over-year basis. During the same period last year, the company posted $1.38 EPS. As a group, research analysts predict that Zoom Communications, Inc. will post 2.93 EPS for the current fiscal year.

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.