Zoom was one of the biggest beneficiaries of the remote work trend, which took place during the height of the pandemic in 2020.
But as more people return to the office on a regular basis, projections for the company have been falling. And one of Wall Street’s top analysts thinks the worst is yet to come.
Citi analyst Tyler Radke downgraded the videoconferencing software company’s shares to a rare “sell” rating on Tuesday.
He cut his share price target to $91 a share, nearly 15% below the current price and almost the lowest target among analysts who follow Zoom. Two other analysts have a target of $90.
Radke said in a report that “Zoom’s post-Covid growth trajectory has always been more challenging” but that there are now “new obstacles to sustaining growth”.
He cited increased competition from Microsoft, which has rival video conferencing product Teams, as well as concerns about a slowing economy hurting small business demand.
For those reasons, Radke said he was “making significant cuts to estimates” of his sales and free cash flow forecasts for Zoom.
Zoom shares are down 5% on Tuesday to about $108. The shares are now down nearly 45% this year and are trading more than 80% below the all-time high of about $589 they hit in October. of 2020.
Source: CNN Brasil
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