Zoom Video (ZM) User Conference Highlights Channel Investments and Existing Customer Expansion Opportunity - KeyBanc
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KeyBanc analyst Alex Kurtz reiterated an Overweight rating and $398.00 price target on Zoom Video (NASDAQ: ZM) after the company announced that just 36% of the global 2000 are spending more than >$10K annually. Only 5% are spending >$1M implying there is substantial room to expand its presence within IT budgets.
The analyst stated "A large focus at the analyst session was the ramp in channel investments (partner base grew to 3,500+ partners, from <2K last year) with the channel contributing >20% of revenue today, especially internationally as partners bring localized expertise. Channel investments are also a key contributor to Zoom Phone and Zoom Rooms penetration, at ~4% and ~5% attach rates of the customer base, respectively, with channel contributions to Zoom Phone up 10 pts y/y (27% of F2Q22 bookings). We see continued upsell of Phone as a key growth driver as we model the Company achieving ~4M seats by FY23 (from ~2M today) and reaching ~7% customer penetration and Zoom Rooms a potential return to office opportunity to offset consumer churn risk with 90M conference rooms to target (4x ARPU uplift, $45B TAM potential)." "While investors likely were hoping for more forward-looking business metrics, we remain encouraged by Zoom's expansion opportunity supported by new routes to market and an expanding product set that should increase the importance of Zoom over time".
Shares of Zoom Video closed at $290.18 yesterday.
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