Zoom Analysts Boost Targets, Raise Hands As AI Tools Gain Traction

Wall Street analysts rerated Zoom Communications, Inc (NASDAQ:ZM) after the company reported its first-quarter results on Wednesday.

Zoom reported quarterly earnings of $1.43 per share, which beat the analyst consensus estimate of $1.31. Quarterly revenue reached $1.17 billion, which met the Street estimate.

Zoom raised its fiscal 2026 adjusted EPS guidance from $5.34-$5.37 to $5.56-$5.59, versus the $5.41 analyst estimate, and raised its revenue outlook from a range of $4.79 billion-$4.79 billion to a new range of $4.8 billion-$4.81 billion, versus the $4.79 billion estimate.

Also Read: Zoom Faces International Growth Risks Amid Macroeconomic And Tariff Headwinds: Analyst

• Needham analyst Joshua Reilly rated Zoom Communications with a Buy and a $100 price target on Thursday.
• Rosenblatt analyst Catharine Trebnick maintained a Buy and raised the price target from $90 to $100 on Thursday.
• Oppenheimer analyst Timothy Horan had a Perform rating on Thursday.
• Citizens analyst Patrick Walravens maintained a Market Perform rating on Thursday.
• Piper Sandler analyst James Fish reiterated a Neutral and raised the price target from $77 to $85 on Wednesday.
• Cantor Fitzgerald analyst Thomas Blakey maintained a Neutral and $87 price target on Wednesday.

Needham: Reilly noted Zoom is at an interesting inflection point where revenue headwinds from Online are easing, dilution from stock-based compensation has peaked, and the share count can decrease with buybacks moving forward, and finally, the pricing power of the business may be returning due to new embedded AI functionality as evidenced by the latest price increase for Online taking effect June 1. Given all of these items, and roughly 33% of the company’s market cap is in cash, the analyst noted Zoom is well positioned for new AI-driven products to begin moving the needle on growth.

Reilly projected fiscal 2026 adjusted EPS of $5.57 and fiscal 2027 adjusted EPS of $5.64.

Rosenblatt: Zoom’s first quarter total revenue increased 3% to $1.18 billion. It surpassed Street estimates and the high end of guidance, Trebnick noted. The Enterprise segment now constitutes 60% of total revenue. It grew by 6%, while the online segment achieved a record low churn rate of 2.8%, the analyst said.

Adjusted EPS of $1.43, beat by $0.12 on operating expenditure savings and larger than expected share repurchase. She added that Zoom Customer Experience is now a triple-digit ARR segment, growing in high double digits. Zoom lifted its fiscal 2026 revenue guidance and raised its outlook for operating income. It also adjusted EPS while reaffirming free cash flow guidance.

Trebnick projected fiscal 2026 adjusted EPS of $5.56 (prior $5.34) and fiscal 2027 adjusted EPS of $5.58 (prior $5.48).

Oppenheimer: Horan noted that Zoom grew first-quarter revenue by 2.9%, a +90 bps beat. The analyst said that Enterprise revenue was 60% of total revenue, up +166bps, and increased 6%. He notes that gross margins rose 34bps for the quarter and fell -13bps for the year.

The company continues to invest in AI. Adoption of AI Companion continues to grow, with monthly active users up ~40% sequentially, Horan said. AI Companion’s usage is extending beyond meeting summaries, he added. Horan projected fiscal 2026 adjusted EPS of $5.53 and fiscal 2027 adjusted EPS of $5.92.

Citizens: While macro pressure and guidance prompted Walravens to lower his full-year expectations for the Enterprise business, he mentioned some positive elements. Zoom Contact Center is a triple-digit ARR business growing in double digits; Zoom AI Companion’s monthly active users are increasing by 40% sequentially. The analyst said Zoom is well-positioned to benefit from how AI is transforming how work gets done. He added that Zoom can return capital to shareholders through its $2 billion buyback program and maintains significant M&A flexibility as it is sitting on a cash hoard of $7.8 billion.

Walravens increased his fiscal 2026 adjusted EPS estimate to $5.58 from $5.35 (consensus $5.41) and increased his fiscal 2027 adjusted EPS estimate to $5.61 from $5.52 (consensus $5.52).

Piper Sandler:  It was a relatively normal quarter for Zoom, as newer products show strength in selling into the installed base and lengthening deal durations, which would have helped normalized Direct growth accelerate, Fish noted. However, the core remains challenged with in-period NRR <100%, and Direct/Enterprise guide was lowered given concerns around some large US customers’ deal-cycles, the analyst said. The guide dynamics appear conservative and he remains encouraged by the Online Pro price increase, CX size and growth, CX Elite package adoption, Workvivo acceleration, and Phone sustainability.

Fish projected fiscal 2026 adjusted EPS of $5.37 and fiscal 2027 adjusted EPS of $5.34.

Cantor Fitzgerald: The rerating reflected a strong first-quarter report driven by large customers, particularly $100k+ Enterprise customers. Zoom phone and CCaaS continue solid growth, driven by channel, competitive displacements, and AI, Blakey noted. Online saw record churn, which was flat sequentially. The analyst added that the updated fiscal 2026 topline guide implied that these trends continue for the rest of fiscal 2026.

Blakey projected fiscal 2026 adjusted EPS of $5.59 (prior $5.36) and fiscal 2027 adjusted EPS of $5.60 (prior $5.47).

Price Action: ZM shares are trading higher by 0.46% to $82.65 at last check on Thursday.

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