- Morgan Stanley (NYSE:MS) analyst Meta Marshall downgraded Zoom Video Communications, Inc (NASDAQ: ZM) from Overweight to Equal-Weight and cut the price target from $130 to $90.
- Marshall continues to think there is tremendous value in the enterprise platform ZM has built, something she expects to hear more about at the upcoming Zoomtopia.
- However, she believes this value will be challenging to realize while direct (Online) business normalizes post-COVID and begins to incorporate a weaker macro environment.
- Given that Marshall does not expect stabilization in Online business until early next year, the overhang will likely remain on the stock for the next six months, limiting the opportunity for value realization.
- She will look for an opportunity to again turn more positive on ZM with signs of stabilization in direct business coupled with continued Enterprise growth, proof points of which she could hear more about at the upcoming Zoomtopia.
- Marshall could be too conservative if the company were to post a significant upside to her cash flow estimates.
- Alternatively, she could be proven too positive if FX and direct business headwinds create an outsized negative impact on cash flow.
- Price Action: ZM shares traded higher by 0.35% at $73.98 on the last check Tuesday.
| Mar 2022 | Wolfe Research | Downgrades | Outperform | Peer Perform |
| Mar 2022 | RBC Capital | Maintains | Outperform | |
| Mar 2022 | Wells Fargo (NYSE:WFC) | Maintains | Equal-Weight |
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