On Thursday, Zoom Video Communications Inc. (NASDAQ:ZM) shares maintained Overweight rating with a steady price target of $68.00 from Piper Sandler. The endorsement comes amidst the company's annual Zoomtopia user conference, where Zoom introduced its AI Companion 2.0 and customization options for the AI tool. Additionally, Zoom shared an updated long-term operating margin (OPM) outlook.
The firm highlighted several key takeaways from the event. Firstly, Zoom's growth in recent years is attributed to extended contract durations and expansion through long-term bundled deals. Secondly, the company has unveiled a path to monetize its AI offerings through customization capabilities.
Thirdly, Zoom's Customer Experience (CX) solution is gaining traction in larger deals, notably within Cisco (NASDAQ:CSCO)'s installed base, and is outperforming other established Contact Center as a Service (CCaaS) providers.
The analyst was particularly impressed with the presentation on Zoom's CX offerings. The updated OPM forecast, which suggests an approximate 4.5% increase at the midpoint, aligns with market expectations, although the timeline for this improvement remains unspecified. Despite the positive developments, the analyst suggests that with Zoom still undergoing a transition, investors may seek opportunities elsewhere.
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