ZM: Partner-First Model And AI Monetization Will Support Upside Repricing

Analysts have nudged their average price target on Zoom Communications up to $115 from $110, citing increasingly bullish channel checks around the company’s partner first go to market pivot, modestly stronger long term revenue growth expectations, and a willingness to underwrite a higher future earnings multiple despite some compression in projected profit margins.

Analyst Commentary

Recent Street research on Zoom Communications shows a constructive backdrop, with several bullish analysts pointing to improving execution and a clearer growth path. The latest round of estimate revisions and rating actions reflects growing confidence that the company can translate its partner first strategy and product expansion into sustained, if still measured, top line acceleration.

Across the coverage universe, sentiment has shifted toward a more balanced view of risk and reward. While some observers continue to emphasize the need for a more pronounced growth inflection, others are increasingly willing to underwrite higher valuation multiples on the back of stabilizing core trends, emerging AI monetization and traction in newer offerings such as Zoom Phone.

Even firms taking a more neutral stance on the stock acknowledge that downside risk appears limited at current levels, with Zoom’s cash generation, margin profile and undemanding multiples providing a valuation floor. This mix of cautious realism and growing optimism has created an environment where incremental positive data points on growth or execution could quickly translate into further price target revisions.

Coverage initiations at market weight levels underscore that, while not universally viewed as a high conviction outperform, Zoom is increasingly seen as a credible compounder in collaboration and communications, rather than a single product video conferencing story. The emphasis has moved from pandemic era usage spikes to the durability of enterprise relationships, attach rates for adjacent products and the early contribution of AI features.

Looking ahead, analysts indicate that the key debates will center on the pace of enterprise upsell, the scalability of the partner first motion and the timeline for AI to become a more visible driver of both revenue and margin expansion. How quickly management can convert its strategic initiatives into consistent mid teens growth will likely determine whether the stock earns a sustained re rating.

Bullish Takeaways

• Bullish analysts are lifting price targets into the $110 to $115 range, signaling greater confidence that Zoom can support a higher earnings multiple as growth expectations firm up.
• Multiple Buy rated calls highlight improving product momentum, particularly in Zoom Phone and early AI offerings, as key drivers of a more durable, diversified growth profile.
• Optimistic views emphasize that the partner first go to market shift is beginning to enhance sales efficiency and pipeline visibility, supporting both revenue acceleration and more resilient valuation.
• Even from a neutral rating stance, some research notes argue that Zoom’s current valuation is undemanding and that successful execution on new products could trigger a meaningful re rating over the medium term.

What's in the News

• Zoom Communications raised its full fiscal 2026 revenue outlook to a range of $4.852 billion to $4.857 billion, implying about 4.1% year over year growth at the midpoint and reinforcing analyst expectations for steady, if modest, top line expansion (Company guidance).
• The company issued fourth quarter fiscal 2026 guidance calling for revenue between $1.23 billion and $1.235 billion, also roughly 4.1% growth at the midpoint, setting a near term bar that will help test confidence in its partner first and AI driven strategy (Company guidance).
• Zoom expanded its strategic AI alliance with NVIDIA by integrating NVIDIA Nemotron technologies into its federated AI architecture to power AI Companion 3.0. This enables a hybrid model approach that routes queries between proprietary small language models and a fine tuned large language model for deeper reasoning and better cost efficiency across regulated industries (Key Developments).
• As part of its capital return program, Zoom completed the repurchase of more than 32.5 million shares, about 10.64% of shares outstanding, for roughly $2.39 billion, and increased its overall buyback authorization to $3.7 billion, signaling ongoing balance sheet strength and management confidence in long term value creation (Buyback updates).
• New device and ecosystem partnerships, including expanded certifications with Jabra and an enlarged global collaboration with NUSO for Zoom Phone and Zoom Contact Center, are broadening hardware support and distribution channels and reinforcing Zoom’s evolution into a more integrated communications platform (Client announcements).

Valuation Changes

• Fair Value: Risen slightly, with the intrinsic value estimate moving from $113.81 to $115.00 per share.
• Discount Rate: Increased modestly, from 8.40% to approximately 8.47%, reflecting a slightly higher required return.
• Revenue Growth: Edged higher, with long term annual revenue growth assumptions moving from about 5.05% to roughly 5.14%.
• Net Profit Margin: Fallen significantly, with the long term margin assumption reduced from around 33.45% to about 24.77%.
• Future P/E: Risen meaningfully, with the forward earnings multiple assumption increasing from roughly 21.6x to about 28.2x.