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

Core Insights - Wall Street analysts have rerated Zoom Communications, Inc following the company's strong first-quarter results, with earnings per share (EPS) of $1.43 exceeding the consensus estimate of $1.31 and revenue of $1.17 billion meeting expectations [1][2] Financial Performance - Zoom raised its fiscal 2026 adjusted EPS guidance from a range of $5.34-$5.37 to $5.56-$5.59, surpassing the analyst estimate of $5.41 [2] - Quarterly revenue for the first quarter increased by 3% to $1.18 billion, exceeding Street estimates and the high end of guidance [5] - The Enterprise segment now constitutes 60% of total revenue, growing by 6%, while the online segment achieved a record low churn rate of 2.8% [5][7] Analyst Ratings and Projections - Needham analyst Joshua Reilly rated Zoom with a Buy and set a price target of $100, while Rosenblatt analyst Catharine Trebnick maintained a Buy and raised the price target from $90 to $100 [10] - Oppenheimer analyst Timothy Horan projected fiscal 2026 adjusted EPS of $5.53 and fiscal 2027 adjusted EPS of $5.92 [8] - Citizens analyst Patrick Walravens increased his fiscal 2026 adjusted EPS estimate to $5.58 from $5.35 [11] Strategic Positioning - Analysts noted that Zoom is at an inflection point with easing revenue headwinds from Online, peaked dilution from stock-based compensation, and potential for share buybacks [4] - The company continues to invest in AI, with the adoption of AI Companion growing by approximately 40% sequentially [8][9] - Zoom has a cash reserve of $7.8 billion, providing significant flexibility for capital returns and potential M&A opportunities [9] Market Trends - The updated fiscal 2026 topline guidance implies that current growth trends are expected to continue [14] - Analysts highlighted that Zoom's newer products are showing strength, particularly in selling into the installed base and lengthening deal durations [12]