Morgan Stanley Reiterates Equalweight Rating on Zoom Video (ZM), Full Bull Upside is Already Baked In

Morgan Stanley analyst Meta Marshall reiterated an Equalweight rating and the below market, $350.00 price target on Zoom Video (NASDAQ: ZM) on the belief that the valuation implies a leadership position, within bull case of ~$190bn UC market, but accounting for little volatility in ARPU.

The analyst stated "We estimate ZM's current valuation implies a ~30% share of a ~$190bn bull case UCaaS/video conferencing TAM by FY2035. Having been able to prove share capture ability, going from ~20% share to ~40% during COVID-19, we are willing to credit ZM as the long term share leader in the UCaaS/video conferencing market. However, the ~$190bn TAM we reference is a bull case assumption, assuming very little pricing pressure from current list prices (see our Analysis section for more detail) and conversion of "pro-sumer" / higher education markets into paying users. In reality, we think to capture a greater portion of the "pro-sumer" or education verticals, ARPUs will need to come down, making our base case TAM ~$150bn, with current valuation implying no share loss over the next ~15 years".

For an analyst ratings summary and ratings history on Zoom Video click here. For more ratings news on Zoom Video click here.

Shares of Zoom Video closed at $505.00 yesterday.

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