Spruce Point Highlights Zoom's Undervalued Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 24 2026
0mins
Should l Buy ZM?
Source: stocktwits
- Market Undervaluation: Spruce Point Capital Management highlights that Zoom's leadership in video communications and its $1.2 billion stake in AI firm Anthropic are overlooked by the market, suggesting the stock is materially undervalued and presents a compelling opportunity for investors.
- Buyback Plan Recommendation: The firm recommends a $4 billion share buyback plan to better utilize Zoom's strong cash position while also advocating for cost-cutting measures and efficiency improvements to enhance profit margins and overall financial health.
- Operational Optimization Path: Spruce Point proposes restructuring the underperforming international business and enhancing marketing strategies to reposition Zoom as an enterprise platform rather than merely a video app, thereby increasing its competitive edge in the market.
- Acquisition Risk Potential: While Spruce Point warns management against aggressive M&A strategies, it notes that a sale of the company could become a viable option if value is not unlocked, indicating strong interest from private equity that could support a premium valuation.
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Analyst Views on ZM
Wall Street analysts forecast ZM stock price to fall
20 Analyst Rating
12 Buy
7 Hold
1 Sell
Moderate Buy
Current: 109.210
Low
85.00
Averages
99.33
High
115.00
Current: 109.210
Low
85.00
Averages
99.33
High
115.00
About ZM
Zoom Communications, Inc. provides an artificial intelligence (AI) work platform for human connection. Zoom Workplace, the Company’s AI-powered, open collaboration platform built for modern work, enables us to streamline communications, increase employee engagement, optimize in-person time, improve productivity, and offer customer choice with third-party apps and integrations. Zoom Workplace, powered by Zoom AI Companion, includes collaboration solutions like meetings, team chat, phone, scheduler, whiteboard, spaces, Workvivo, and more. Its communication products include Zoom Meetings, Zoom Phone, Zoom Team Chat, Zoom scheduler, and Zoom mail and calendar. Its productivity products include Zoom Docs, Zoom Whiteboard, Zoom Clips, and Zoom Tasks. Its space products include Zoom Rooms, Zoom Workspace Reservation, and Zoom Visitor Management. It serves various industries, including education, financial services, government, retail, manufacturing and healthcare.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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