RBC Capital maintained an Outperform rating on Zoom Video Communications Inc. (NASDAQ: ZM) after the company reported second-quarter results that topped analyst expectations, though shares slipped in after-hours trading.
The firm kept its $130 price target unchanged, while peers adjusted their outlooks. Bernstein raised its target to $108 but retained a Market Perform rating, while Benchmark reiterated a Buy rating with a $125 target. Citizens maintained a Market Perform stance.
Zoom reported non-GAAP earnings per share of $1.55, exceeding the $1.48 consensus estimate, and revenue of $1.28 billion, slightly above the $1.27 billion forecast. Revenue grew 4.9% year-over-year, though the 0.7% beat fell short of the company’s four-quarter average of 1.3%.
Enterprise revenue, the company’s fastest-growing segment, rose 7.8%—the strongest increase in three years—and now represents 62% of total sales. Non-GAAP operating margin came in below consensus, while gross profit margin stood at 77.66%. The stock trades at a P/E of 14.89, and InvestingPro’s financial health score is 3.34 out of 5, indicating strong liquidity with more cash than debt.
Fiscal 2027 guidance for revenue and non-GAAP operating income aligned with market expectations, and non-GAAP EPS and free cash flow also exceeded forecasts for the quarter. Shares fell about 4.2% in after-hours trading following the release.
