Zoom Video (ZM) Stock Forecast & Price Target

Zoom Communications is viewed positively because its enterprise business is accelerating, with total revenue of $1.28B up 5% y/y, enterprise revenue up 8% y/y, and the number of customers contributing more than $100k in TTM revenue rising 8.2% y/y to 4,625, while TTM net dollar expansion held at 99% and RPO accelerated for a fourth consecutive quarter to 14%. Its outlook is further supported by strong AI and product diversification momentum, including ZCX ARR growing high-double-digits, Zoom Virtual Agent customer count increasing 256% y/y, paid AI appearing in 9 of the top 10 ZCX deals, and the July 2, 2026 acquisition of Common Room for $250M expanding its revenue-intelligence stack. Despite softness in online revenue, which grew only 1% y/y and led management to lower full-year online expectations to flat, the company still raised FY27 non-GAAP EPS guidance to $6.08-$6.12, lifted free cash flow guidance to $1.780B-$1.820B, and maintained a strong non-GAAP operating income outlook, underscoring durable profitability and cash generation.

Zoom Communications is facing a challenging fundamental setup because its online business is softening, with online revenue growing only 0.6% y/y in F2Q27 and the full-year outlook now embedded at flat, implying a modest 2H decline, while enterprise momentum, though improving to 8% growth, remains insufficient to fully offset that weakness. The company is also experiencing margin pressure from heavier AI investment and acquired businesses, as non-GAAP gross margin fell 70bps y/y to 79.1%, non-GAAP R&D rose 24% y/y to $165.7M, and operating margin compressed to 40.0% from 41.3%, suggesting profitability may be less durable than bulls expect even as management targets long-term margin recovery. In addition, the stock carries elevated risk because valuation already reflects strong growth and profitability expectations, while competition, outages, security incidents, interoperability issues, and limited operating history under the current senior management team create multiple execution risks that could further impair results if enterprise acceleration or AI monetization fails to sustain traction.