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