JPMorgan Downgrades Zoom Video (ZM) to Neutral After ~500% YTD Run-Up

(Updated - December 9, 2020 7:35 AM EST)

(updating comment)

JPMorgan analyst Sterling Auty downgraded Zoom Video (NASDAQ: ZM) from Overweight to Neutral.

The analyst comments "Zoom is fundamentally changing how professionals communicate through the use of its video-first collaboration platform. This is a $40B TAM that Zoom is penetrating at a rapid rate, as shown by one of the most attractive financial profiles seen in all of software at this stage of the company’s lifecycle. The COVID-19 pandemic proved to be a catalyst unlike any we have seen in software for Zoom usage, and the company responded incredibly efficiently and admirably to the challenge, allowing for commerce, education, healthcare and many more functions to continue through the difficult year. The stock responded as well generating the best performance in our entire coverage universe in 2020, up ~500%. At this point we believe the revenue multiple fully reflects the upside potential and believe the under 10-employee segment of the user group poses a risk to churn rates as the vaccine allows for more in-person interaction moving forward which means we expect the shares to perform more in line with our coverage."

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 $409.31 yesterday.

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