Zoom (NASDAQ:ZM) was lifted to neutral from Sell at Citi on Friday, with analysts maintaining the firm's price target on the stock at $66 per share.
Analysts said the firm decided to upgrade shares of the online video calling firm as they see signs of stabilization.
"We see more balanced risk/reward with the stock sitting below our target price and near trough multiples, with most of our downgrade concerns playing out," the analysts wrote.
"We are also watching potential for n-term stabilization to play out with a conservative guide that assumes macro deterioration and web traffic signaling some incremental improvement," they added.
The analysts also noted that ZM's AI companion has seen strong uptake and "could boost free-to-paid conversion, while Contact center is a FY25 call option."
Despite the rating increase, the firm acknowledged ZM "still faces significant risks, some arguably existential," due to looming MSFT competition and lack of pricing and peaking margins/declining efficiency.