Why ZoomInfo (ZI) Stock Is Up Today
What Happened:
Shares of sales intelligence platform ZoomInfo jumped 24.4% in the after-market session after the company reported fourth-quarter results that narrowly topped analysts' revenue expectations. Non-GAAP operating profit also beat expectations, and the company generated strong free cash flows. While revenue guidance for next year suggests a slowdown in growth, guidance was roughly in line with expectations. Given some of the choppy quarters the company has had in the last year and fears about secular tailwinds to the business from AI, these results were likely better than feared.
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What is the market telling us:
ZoomInfo's shares are very volatile and over the last year have had 24 moves greater than 5%. But moves this big are very rare even for ZoomInfo and that is indicating to us that this news had a significant impact on the market's perception of the business.
The previous big move we wrote about was 15 days ago, when the company gained 6.9% on the news that Bank of America analyst Koji Ikeda upgraded the stock's rating from Neutral to Buy and raised its price target from $20 to $25. The new price target represents a potential 45% upside from where shares traded when the upgrade was announced. The analyst added, "The stock trades at a 50% discount valuation to its software peers...leaving lots of runway for multiple expansion...ZI is controversial, and we believe our call is contrarian, so understanding the risks is important."
ZoomInfo is up 2.1% since the beginning of the year, but at $18.15 per share it is still trading 37.3% below its 52-week high of $28.95 from July 2023. Investors who bought $1,000 worth of ZoomInfo's shares at the IPO in June 2020 would now be looking at an investment worth $533.38.
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