One of this year's hottest IPOs is still winning over new fans. Dmitry Netis at Stephens is initiating coverage of Zoom Video (NASDAQ:ZM) with a bullish overweight rating. The analyst's price target of $115 suggests that there's 26% of upside from current levels, an encouraging goal for the provider of video-conferencing solutions for enterprises that has already soared 153% since going public at $36 in April through Thursday's close.  

Netis feels that Zoom is reinventing the user consumption model when it comes to video, a disruptive distinction that's delivering monster growth by gobbling up market share. Bears may be concerned about the size of Zoom's addressable market, but Netis feels that new product launches and international expansion will keep driving Zoom shares higher. 

Several employees in a conference room in a Zoom Video video-conference with someone else.

Image source: Zoom Video.

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Zoom Video had all of the right ingredients to be a hot debutante ahead of its springtime IPO. Revenue soared 114% in fiscal 2019, following a 148% spike a year earlier. Unlike many of the fast-growing companies hitting the market this year with buckets of red ink, Zoom Video is actually marginally profitable. The stock closed out its first day of trading with a 72% surge, and it hasn't really looked back in the three subsequent months. 

We also didn't see Zoom commit the cardinal sin of proving mortal with its first financial report as a public company. Zoom's revenue soared 103% in last month's first quarter of fiscal 2020 results. Revenue growth is expected to slow to between 62% and 63% for the entire fiscal year, but that's still the kind of heady growth that isn't a concern for growth investors. Zoom also broke through again with a small profit on an adjusted basis, and it expects to close out fiscal 2020 in the black.

Video chats have historically been buggy, and that's been true even when the titans of tech introduce video-conferencing as a feature. Zoom Video has been able to cut through the hiccups and pressure points, delivering a service that just works on a consistent basis. The trailing net dollar expansion rate for its larger customers -- enterprises with at least 10 employees -- has stayed above 130% through the last four quarters. 

It's not just Netis at Stephens closing out the week with a bullish nod in Zoom's direction. William Blair analyst Bhavan Suri -- a bull on the stock since initiating coverage of the stock in late May -- reaffirmed his optimistic stance on the shares on Friday morning. Suri met with Zoom's head of investor relations, walking away even more confident that it will continue to gain market share in a  niche that's already benefiting from a secular shift to video communications. 

There's no shortage of bears out there on Zoom. Short interest has more than doubled to 7.9 million shares over the past two months. The stock's valuation is lofty, trading at more than 60 times trailing revenue with an adjusted earnings multiple at nosebleed levels. However, bears can get mauled when they're facing a profitable company with monster growth that seems to be in the early innings of taking over the video communications market. Momentum is firmly in the hands of the Zoom Video stock bulls right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.