- MorganStanley Analyst Meta Marshall downgraded Zoom Video Communications, Inc ZM from overweight to equal weight and shorten the price target $130 to $90.
- Marshall continues to believe the enterprise platform ZM has built has tremendous value, something she expects to hear more about at the upcoming Zoomtopia.
- However, she believes that value will be difficult to realize as post-COVID direct (online) business normalizes and begins to integrate a weaker macro environment.
- Since Marshall doesn’t expect its online business to stabilize until early next year, the overhang will likely remain in the stock for the next six months, limiting the chance for value realization.
- She will be looking for an opportunity to return to a more positive stance on ZM, with signs of stabilization in the direct business coupled with continued company growth, evidence she was able to learn more about at the upcoming Zoomtopia.
- Marshall might be overly conservative if the company significantly upgraded its cash flow estimates.
- Alternatively, it could prove overly positive if headwinds from exchange rates and direct deals have an outsized negative impact on cash flow.
- Price promotion: ZM shares traded 0.35% higher at $73.98 on the latest check Tuesday.
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