Zoom Stock Closes Above 200-DMA For First Time In 5 Months: Deutsche Bank Upgrades Price Target

Communications technology firm Zoom Video Communications Inc (ZM) stock closed above its 200-day moving average for the first time in five months. Deutsche Bank has reportedly upgraded the price target on the stock to $75 from $71 while maintaining a ‘Hold’ rating. The price target increase comes after the firm reported better-than-expected earnings and raised its full-year guidance.

Chart Source: Trading View

Zoom Video reported a 2.1% year-over-year (YoY) rise in total revenues to $1.16 billion, beating an analyst estimate of $1.15 billion. Adjusted earnings per share (EPS) came in at $1.39, higher than an estimate of $1.21. Net income rose 20.35% YoY to $219.02 million.

The firm raised its full-year guidance, expecting total revenue between $4.63 billion and $4.64 billion versus an earlier guidance range of $4.61 billion to $4.62 billion.

Founder and CEO Eric S. Yuan said the company’s online average monthly churn reached its lowest ever rate. The Zoom Contact Center racked up several marquee customers, including its largest single order deal to-date, he added.

The firm noted that new customer acquisition helped drive revenue during the quarter. At the end of the second quarter of fiscal year 2025, Zoom had 3,933 customers contributing over $100,000 in trailing 12 months revenue and approximately 191,600 enterprise customers.

Retail sentiment on Stocktwits hit a one-year high, flipping into ‘extremely bullish’ (90/100) territory from ‘neutral’ a day ago. The move was accompanied by ‘extremely high’ message volume.

Retail investors are enthusiastic about the fact that the firm’s total cash, cash equivalents, and marketable securities (excluding restricted cash), as of July 31, 2024 stood at a whopping $7.5 billion.

However, Zoom shares have lost over 87% since their highs in October 2020 and have a lot of ground to cover to reclaim some past glory.

With Thursday’s upbeat earnings and guidance, the stock received a much-needed fillip that helped push it over 12% higher and close above the 200-DMA for the first time in five months.

Stocktwits users are expressing optimism over the positive breakout.