Zoom Video Communications shares went higher yesterday after better-than-expected Q4 earnings pushed analysts to increase their price targets, even as they showed concern about the company’s after-pandemic growth potential.
The company reported Q4 adjusted earnings of $1.22 per share on revenue numbers of $882.5 million, which is a 369% surge year-over-year. While analysts were anticipating the company to announce earnings of 79 cents per share on a revenue number of $811.7 million.
Keybanc’s Alex Kurtz said that Zoom had another great quarter, although he cautioned that investor focus will now be on how the company might support its own valuation.
Piper Sandler with James Fish said in a note that it “is not over yet in communication software,” hinting at more possible upgrades later on. He increased his one-year target from $501 to $541 and kept his overweight rating.
Morgan Stanley said Zoom’s earnings were “meaningful” and its positive outlook means it will increase estimates, though they remain skeptical of what it sees as “churn risk” in the second part of 2022. They raised their one-year target from $390 to $420 and kept their rating on the shares.
Zoom Video shares were at $428.53, which is higher by 4.61%. The stock increased as much as 12% late Monday after the earnings numbers went public.
That increase translated into a wealth gain of $2 billion for Zoom Video founder Eric Yuan, who owns nearly one-fifth of the company. Yuan’s net-worth is now at $22 billion.