ZM Should I Buy
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Zoom Communications Inc (ZM) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company's financial performance is strong, with significant YoY growth in revenue, net income, and EPS. Analyst ratings have been upgraded recently, with a notable price target of $115, suggesting potential upside. Technical indicators are bullish, and options data reflects positive sentiment. The company's focus on AI and its investment in Anthropic provide additional long-term growth catalysts.
The stock's MACD is positive and contracting, indicating a bullish trend. RSI is neutral at 50.329, but moving averages are bullish (SMA_5 > SMA_20 > SMA_200). Key support and resistance levels are Pivot: 91.92, R1: 95.483, S1: 88.357, R2: 97.685, S2: 86.155, suggesting the stock is trading near support and has room to move higher.
Wolfe Research upgraded the stock to Outperform with a $115 price target, citing growth reacceleration and strength in AI-driven products.
The company's $51M investment in Anthropic could yield significant returns, with estimates of $2B-$4B in value.
Strong Q3 financial performance, with revenue, net income, and EPS showing robust growth.
Bullish technical indicators and positive sentiment in options data.
Neutral sentiment from hedge funds and insiders, with no significant trading trends.
Limited near-term growth expectations as noted by Morgan Stanley, with investors waiting for FY27 guidance.
In Q3 2026, revenue increased by 4.44% YoY to $1.23 billion. Net income surged by 196% YoY to $612.87 million, and EPS grew by 204.55% YoY to 2.01. Gross margin improved to 77.9%, up 2.65% YoY, reflecting strong operational efficiency.
Recent upgrades include Wolfe Research upgrading to Outperform with a $115 price target and Baird highlighting the potential value of Zoom's investment in Anthropic. Analysts generally see growth reacceleration and AI opportunities as key drivers for the stock. Price targets range from $90 to $115, with a consensus leaning towards a positive outlook.
