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Why Zoom Stock Jumped Today

By Joe Tenebruso – Jul 29, 2021 at 1:46PM

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Analysts are growing more bullish about the videoconferencing leader's growth prospects.

What happened 

Shares of Zoom Video Communications (ZM -2.24%) climbed on Thursday, following bullish analyst commentary. As of 1:05 p.m. EDT, Zoom's stock price was up more than 5%.

So what

KeyBanc analyst Steve Enders raised his rating on Zoom's stock from sector weight to overweight. He sees the cloud communication platform's share price rising to $428, representing potential gains to investors of roughly 10% from the stock's current price near $390.

A digital bull is climbing a rising stock chart.

KeyBanc sees more upside ahead for Zoom's shareholders. Image source: Getty Images.

Enders envisions a future in which businesses increasingly adopt a hybrid work environment, with employees working in both traditional offices and their homes. Thus, he expects companies to continue to invest in cloud communication services even after the coronavirus crisis eventually subsides.

Additionally, Enders believes Zoom's $14.7 billion acquisition of Five9 (FIVN 0.17%) would become another powerful post-pandemic growth driver. The deal is expected to strengthen Zoom's relationships with its enterprise clients and provide it with an intriguing expansion opportunity into the $24 billion contact center market. 

Now what

After experiencing the benefits of having their employees work from home during the pandemic, many businesses are choosing to embrace the remote-work trend. Zoom's best-in-class technology is helping to make this possible. Demand for its cloud-based communications solutions, in turn, is likely to remain strong for the foreseeable future.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Five9 and Zoom Video Communications. The Motley Fool has a disclosure policy.

Stocks Mentioned

Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$69.87 (-2.24%) $-1.60
Five9 Stock Quote
Five9
FIVN
$64.54 (0.17%) $0.11

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