ZoomInfo (ZI) Explodes on Strong Q2 Results and Guidance, Analysts Bulled Up with 10 PT Hikes

August 3, 2021 9:33 AM EDT
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Price: $67.16 --0%

Rating Summary:
    16 Buy, 3 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 4 | Down: 3 | New: 7
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Shares of ZoomInfo Technologies (NASDAQ: ZI) are up about 12% in today’s trading session after the company delivered better-than-expected Q2 results. At least ten Wall Street analysts raised their price target on the stock following the print.

The company recorded earnings of $0.05 per share, while adjusted EPS came in at $0.14 per share, ahead of analyst estimates of $0.12 per share. Revenue for the quarter came in at $174 million to again top the $162.4 million consensus from the Street.

"ZoomInfo delivered another record quarter, including the highest levels ever for both retention activity and customer engagement, and accelerating revenue growth, as customers in all industries continue to choose ZoomInfo to transform their go-to-market motion,” said Henry Schuck, ZoomInfo Founder and CEO.

“ZoomInfo is the only company delivering a modern go-to-market platform that brings together best-in-class intelligence with comprehensive data management, workflow, and engagement software.”

As for guidance, ZI expects EPS between $0.11 and $0.12 for the ongoing quarter on sales between $182 million to $184 million. On a full-year basis, ZoomInfo is projecting EPS between $0.50 and $0.51 per share on revenue between $703 million and $707 million.

BofA analyst Koji Ikeda maintained the “Buy” rating and hiked the price target to $75.00 per share from $70.00 on “solid Q2 results and raised guidance.”

“Most importantly, in our view, the company achieved a Rule of 100 profile, balancing strong total revenue growth (+57% y/y) and uFCF margins (43%), which is very rare in software, and speaks to the ripe end-market opportunity and management’s ability as good executors. Furthermore, 2021 guidance implies a Rule of 87 profile at the midpoint, which supports valuation and is impressive for a business of ZoomInfo’s scale. With good potential growth drivers ahead (Chorus.ai, Insent.ai, Engage, international, among others), we are increasingly confident in ZoomInfo’s ability to generate $2bn in total revenue by 2025 (implies 29% 2021-2025 CAGR at the 2021 revenue guidance midpoint), which is a great anchor for LT investors,” the analyst wrote in a note sent to clients.

Mizuho’s Siti Panigrahi raised the price target by $7.00 to $70.00 per share on the Buy-rated ZI.

“We believe Q2 results and Q3 guidance once again validate ZoomInfo's importance as an essential tool for sales and marketing teams with digital transformation efforts continuing apace. Given ZI shares' underperformance (-9% down from peak since June 2020 IPO vs CLOU's +40% gain and IGV's +49% advance), we expect investors to interpret today's results as an inflection point for demand of the company's data/platform and positively re-rate shares as forward estimates increase,” Panigrahi said in a memo.

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