Shares of ZoomInfo Technologies skyrocketed following an impressive earnings report that has left Wall Street impressed for a multitude of reasons.
Strong Financials
Positive Outlook
For the upcoming fiscal quarter, ZoomInfo expects revenue to range between $307 million and $310 million, slightly below analysts' prediction of $309 million. Looking ahead to fiscal year 2024, the company forecasts a revenue range of $1.26 billion to $1.28 billion, aligning with Wall Street's expectation of $1.27 billion. In addition, ZoomInfo provided guidance on adjusted operating income, net income, free cash flow, and weighted average shares outstanding.
Analyst's Perspective
According to analysts at Truist Securities, "Overall, we believe that the FY24 guidance provided by ZoomInfo is conservative." They further added that their rating remains as "Hold," but they have increased their price target from $16 to $20 and raised revenue estimates. In a note, they mentioned that the low end of the revenue projection assumes a worsening overall economic climate, while the high end envisions stability or even slight improvement in market conditions.
With these impressive financial results and positive outlook, ZoomInfo Technologies is poised for continued success in the near future.
ZoomInfo's AI Solution, CoPilot, Expected to Drive Growth
In a recent announcement, ZoomInfo revealed their new AI solution called CoPilot, which provides valuable suggestions to sellers regarding customer interactions. Industry experts believe that this innovative tool has the potential to significantly boost revenue in the future.
Although ZoomInfo is still in the process of fine-tuning the pricing and monetization strategies for CoPilot, the company aims to migrate the majority, if not all, of its customers to this new platform within the next few years. It is anticipated that this transition will be accompanied by a higher price point, indicating optimism for greater profitability.
Additionally, ZoomInfo provided insights into customer behavior trends. In a testament to the quality of their product, they reported that 550 customers who had previously churned in 2022 and early 2023 have returned to ZoomInfo in the second half of 2023. This data speaks to the company's ability to regain customer confidence and highlights the value they offer in the market.
Analysts from Mizuho Securities and Needham have maintained their positive outlook on ZoomInfo. While Mizuho Securities has kept a "Buy" rating and a price target of $23, they have adjusted their estimates. On the other hand, Needham has also maintained a "Buy" rating with a $25 price target, lower earnings estimates, and an increased revenue forecast.
As a result of these positive developments, ZoomInfo's stock experienced an 8.9% increase in Tuesday's trading session. While the shares have faced a 35% decline over the past year, the recent advancements indicate potential for future growth.
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