KeyBanc Ups Zoom Target to $74 Amid Cautious Outlook

KeyBanc has revised its price target for Zoom (ZM) upward to $74, reflecting a recalibration of the company’s long-term growth potential amid evolving enterprise demand. The brokerage continues to maintain an underweight rating, indicating a belief that the stock may underperform relative to broader market benchmarks. The $74 target represents a 15% upside from ZM’s closing price on the day of the announcement, suggesting investors should monitor for potential near-term momentum. The move follows a period of mixed performance for Zoom, which has experienced slowing revenue growth and increased competition from Microsoft Teams and Google Meet. Despite these headwinds, KeyBanc highlighted improvements in gross margin expansion and sustained enterprise adoption, particularly in verticals like healthcare and education. The firm noted that ZM’s recurring revenue base now exceeds $2.3 billion annually, underscoring a resilient subscription model. Market reaction has been modest, with ZM shares showing a 1.2% gain in after-hours trading. Analysts suggest the unchanged underweight rating limits aggressive buying interest, though the upward revision may attract value-oriented investors seeking a catalyst in the communication technology space. The target adjustment comes amid broader sector scrutiny of SaaS pricing power and customer retention metrics. Investors are now focused on upcoming earnings in April, where ZM is expected to report fourth-quarter results. The company’s ability to maintain gross retention rates above 105% and expand its international footprint will be key indicators of sustained momentum.