Aug. 14 at 12:10 AM
$ZM
Zoom: BUY | Target
$159
I am upgrading Zoom (ZM) to BUY with a
$159 target.
The market still values ZM like a slow-growth video company. I think that is changing.
The company generates nearly
$2 billion in annual free cash flow, has a massive cash position, and is aggressively buying back stock. That means FCF and earnings per share can grow much faster than revenue.
Add in AI Companion, Contact Center and Zoom’s move into AI-driven communications and workflow, and I believe there is a real opportunity for the multiple to expand.
Technically,
$106 was the breakout.
$93 is major support.
The story is simple: strong FCF + buybacks + AI + improving growth = higher EPS and a higher multiple.
BUY — Target
$159.
