Zoom Communications, Inc. (NASDAQ: ZM) is closing out 2025 looking very different from the “pandemic video app” it was once pigeonholed as. Shares are trading around $87–88, giving the company a market capitalization near $26 billion, a trailing P/E of roughly 17x and a forward P/E under 15x, based on consensus earnings estimates. [1]
New research notes and institutional filings dated December 7, 2025 add fresh detail to the investment story: Wall Street now broadly rates ZM a “Hold” with modest upside, while big money managers continue to accumulate shares even as insiders take profits after a strong AI‑driven rally. [2]
Below is a structured look at ZM stock as of December 7, 2025 — from price action and fundamentals to the latest forecasts, AI strategy and key risks.
ZM stock today: price, valuation and trading backdrop
As of the last full trading session (Friday, December 5), ZM closed at $87.65, with after-hours trading around $86.54. That puts the stock near the upper end of its 52‑week range of $64.41 to about $91, and just below its recent highs after a strong post‑earnings run. [3]
Key snapshot metrics:
- Market cap: about $25.9–26.0 billion
- Trailing EPS (ttm): ~$5.13
- Trailing P/E: ~17x
- Forward P/E: ~14–15x
- Beta: ~0.8 (meaning lower volatility than the broader market)
- No dividend at present. [4]
Fundamentally, Zoom is now a slower‑growing but highly profitable software business. Trailing‑twelve‑month revenue stands near $4.8 billion, with net income around $1.6 billion, implying very strong margins for a communications platform. [5]
Fresh December 7 headlines: consensus “Hold” and new institutional buying
Two MarketBeat reports dated December 7, 2025 are the main brand‑new pieces of ZM news:
- Analyst consensus: “Hold” with mid‑single‑digit upside
- 26 covering firms collectively rate Zoom 1 Sell / 14 Hold / 11 Buy, for an overall “Hold” recommendation.
- The average 12‑month price target is about $92.43, only ~5%–6% above the current share price. [6]
- MarketBeat highlights that Zoom’s latest quarter beat expectations, yet analysts remain divided on whether growth justifies a much higher multiple. [7]
- New institutional stake from 1832 Asset Management
Taken together, December 7’s updates paint a picture of steady institutional interest even as analyst targets cluster not far above the current price.
Q3 FY26 earnings: beat on profit, modest growth and huge cash flow
Zoom’s current narrative really shifted on November 24, 2025, when the company reported results for the third quarter of fiscal 2026 (quarter ended October 31, 2025). [10]
Headline numbers:
- Revenue: $1.2298 billion, +4.4% year over year (4.2% in constant currency).
- Enterprise revenue: $741.4 million, +6.1% YoY; online revenue grew 2.0% to $488.4 million.
- Non‑GAAP EPS:$1.52, up 10.1% from $1.38 a year earlier, and ahead of consensus (~$1.44–1.48).
- GAAP EPS:$2.01, up more than 200% YoY, helped by lower stock‑based compensation and strong profitability.
- Non‑GAAP operating margin:41.2%, with GAAP margin 25.2% — very high for a software company of this size.
- Operating cash flow:$629.3 million, up 30.2% YoY, for a 51.2% cash‑flow margin; free cash flow margin reached 50%. [11]
Customer metrics reinforce the “mature but still growing” story:
- 4,363 customers now contribute more than $100,000 in trailing‑12‑month revenue, up 9.2% YoY.
- Enterprise net dollar retention is 98%, indicating a very stable large‑customer base despite macro and competition. [12]
The market’s reaction was clearly positive. Multiple outlets report that ZM shares jumped mid‑single to low‑double‑digits in the sessions following the release, helped by the beat on EPS, healthier margins and increased guidance. [13]
Guidance and earnings forecasts: 2026 looks comfortably profitable
Zoom not only beat expectations; it raised its outlook:
- Q4 FY26 guidance
- Revenue: $1.230–1.235 billion
- Non‑GAAP EPS: $1.48–1.49 [14]
- Full‑year FY26 guidance
- Revenue: $4.852–4.857 billion
- Non‑GAAP EPS: $5.95–5.97
- Free cash flow: $1.86–1.88 billion [15]
Zacks’ latest update (December 5) shows analysts following this lead:
- Current‑quarter EPS consensus: $1.48, +5% vs. the year‑ago quarter.
- Full‑year EPS consensus:$5.94, up 7.2% YoY.
- Over the past month, 8 analysts raised their full‑year EPS estimates with no downward revisions, lifting the consensus by about 5.45%.
- ZM now carries a Zacks Rank #2 (Buy), reflecting favorable estimate revisions. [16]
Looking further out, Simply Wall St’s long‑term model projects Zoom reaching roughly $5.3 billion in revenue and $1.2 billion in earnings by 2028, implying low‑single‑digit revenue growth from here but sustained high profitability. Their fair value estimate is around $92.30 per share, about 7% above recent trading levels. [17]
Wall Street’s view: cautious optimism and modest upside
Across different data providers, the broad message is consistent: Zoom is solid and profitable, but expectations are tempered.
- StockAnalysis aggregates 23 analysts and classifies the average rating as “Buy” with a $92.19 average target, implying ~5% upside from the latest price. [18]
- MarketBeat, using a slightly different sample and methodology, shows 26 firms at an average “Hold” rating, but with a similar average target near $92.4. [19]
- GuruFocus notes that the average Street target is about $92.66 (high $115, low $67), implying roughly 12% upside from a recent reference price around $82.50 — but its own GF Value model pegs fair value closer to $77, suggesting mild downside from that same reference. [20]
Recent rating and target‑price actions underline the mixed sentiment:
- Benchmark: Buy, price target lifted from $102 to $110.
- RBC Capital: Outperform, target $100.
- Wells Fargo: Initiated coverage at “Equal‑Weight” with a $90 target.
- Cantor Fitzgerald: Neutral, $87 target.
- KeyBanc: Underweight, target cut to $69 after Q2, citing concerns that the guidance raise was less impressive than it sounded. [21]
One recent deep‑dive from Directorstalk frames ZM as having about 10% upside to an average target around $94.6, with strong free cash flow (~$2.0B) and ROE near 18%, but also highlights the lack of a dividend and ongoing competition as reasons for caution. [22]
In short: Wall Street mostly likes Zoom’s fundamentals but is hesitant to call it a high‑growth story again.
AI‑first strategy: from video meetings to agentic workflows
Zoom’s attempt to grow again is heavily tied to its AI‑first platform strategy.
AI Companion and CX suite
In its Q3 release, Zoom emphasized AI Companion 3.0, Custom AI Companion, and an “AI‑first Customer Experience suite” as major drivers of recent deals and one of the best CX quarters in company history. [23]
StockStory’s recap of the Q3 earnings call notes that:
- AI Companion adoption grew more than fourfold year over year,
- AI features are increasingly embedded in competitive win rates across Zoom Phone, Contact Center and Workvivo, and
- analysts focused heavily on how AI monetization and new workflow tools can re‑accelerate growth. [24]
Earlier in 2025, both Monexa and Zacks highlighted that AI Companion usage was growing ~68% quarter over quarter, underlining strong early adoption for Zoom’s AI assistant within its collaboration suite. [25]
Virtual Agent and GPT‑5‑powered concierge
On August 18, 2025, Zoom announced a major expansion of Zoom Virtual Agent to Zoom Phone:
- A 24/7 AI concierge can now handle calls, route customers, book appointments, and answer common questions in multiple languages (English, Spanish, French, German, Portuguese and Japanese).
- The system integrates OpenAI’s GPT‑5 to power more “agentic” capabilities: listening, understanding, and taking multi‑step actions.
- New products like Zoom Hub unify content, while AI Companion gained enhanced scheduling and summarization features across Meetings and Team Chat.
- Critically, these AI features are included at no extra cost in paid Zoom Workplace plans, a deliberate move to drive adoption. [26]
This AI build‑out sits on top of a broader AI story that started earlier in the year, when Zoom described itself as an “AI‑first work platform” in March and June updates. Those moves included more agentic AI capabilities, a Custom AI Companion add‑on and major Contact Center deals, including a large deployment with a Fortune 100 tech company. [27]
The strategic bet is clear: use AI to deepen engagement, improve unit economics for customers, and make Zoom harder to rip out, even in a world where Microsoft Teams and Google Meet come bundled with broader suites.
Institutional buying vs. insider selling
Institutional ownership in ZM is high and rising — but insiders have been selling into strength.
Big funds stepping in
Recent 13F‑based stories show:
- Norges Bank purchased 6.9 million shares in Q2, a stake worth about $540 million and equal to roughly 2.3% of Zoom’s equity. [28]
- Panagora Asset Management boosted its position by 149.9% to 632,232 shares (~0.21% of the company), valued near $49.3 million. [29]
- 1832 Asset Management opened a smaller but notable new stake of 26,240 shares. [30]
Across these and other funds, institutional investors collectively own about two‑thirds of the float. [31]
Insiders taking profits
At the same time, management has been a net seller:
- CEO Eric Yuan sold over 73,000 shares at an average price around $82–83, worth roughly $6 million.
- Other executives and directors also trimmed positions, bringing total insider sales to roughly 386,000–389,000 shares (over $32 million) in the last quarter.
- Even so, insiders still hold around 11% of the company, a relatively high figure for a mature software name. [32]
These flows don’t provide a simple bullish or bearish signal, but they underline how polarized the risk‑reward looks: large funds see value at current levels, while insiders are comfortable diversifying after a strong run.
What the bulls are saying about ZM stock
A December 4 analysis from Insider Monkey, summarizing a detailed bullish thesis originally posted on Reddit, argues that Zoom’s fundamentals have quietly transformed: [33]
- Earnings quality has improved dramatically: net income over the last year has risen to about $1.6 billion, while stock‑based compensation has dropped from roughly $1.2 billion to $800 million, meaning GAAP profits and cash flow are now much closer together.
- Gross margins remain extremely high, exceeding many large‑cap tech peers.
- Revenue growth, while modest, has re‑accelerated from near‑flat levels, and could support a re‑rating if it approaches ~8% annually.
- With a mid‑teens earnings multiple, strong cash generation, and an expanded $1 billion buyback authorization, the bull case sees potential for material upside if AI‑driven products inflect and the market stops treating Zoom as “just a COVID stock.” [34]
Other bullish takes (from sources like Seeking Alpha, the Motley Fool and Nasdaq) emphasize three themes:
- Cash‑rich, low‑debt, high‑margin profile gives Zoom enormous optionality for buybacks and selective M&A. [35]
- AI features are integrated deeply across the platform, from meetings and chat to contact center and phone, positioning Zoom as an AI infrastructure layer for modern collaboration rather than a single‑feature app. [36]
- A range of valuation models — including DCFs from independent researchers — suggest ZM could be undervalued by mid‑ to high‑single digits, and in some cases by nearly 30%, depending on growth assumptions. [37]
What the bears worry about
Skeptics and cautious analysts raise legitimate concerns:
- Growth is modest: revenue is growing around 4–5% a year, a far cry from pandemic‑era expansion. If AI features mainly defend the base rather than unlock entirely new markets, upside could be limited. [38]
- Bundled competition: Microsoft Teams and Google Meet are effectively “free” inside broader productivity suites. Several analyses flag this as the biggest structural risk, especially for smaller and mid‑size customers. [39]
- Guidance vs. hype: after Q2, at least one analyst noted that the increase in full‑year revenue guidance was smaller than the Q2 beat, implying a quiet cut to second‑half expectations despite upbeat AI rhetoric. [40]
- Mixed valuation signals: While Street targets cluster in the low‑90s, GuruFocus’s GF Value suggests short‑term downside from certain reference prices, and some models see ZM as fairly valued after the recent run. [41]
Add it up, and the bear view is that Zoom may now be a high‑quality, cash‑generating utility stock for enterprise communications, rather than a growth rocket — which means multiple expansion could be limited unless AI actually moves the top line meaningfully higher.
Key catalysts to watch in 2026
For investors following ZM from here, several events and trends look particularly important:
- Next earnings release (expected late February 2026)
Zacks currently lists Zoom’s next report around February 23, 2026; another EPS beat and confirmation of strong cash generation could reinforce the thesis that Zoom is a durable AI‑enabled cash machine. [42] - AI monetization and attach rates
- How quickly do AI Companion, Virtual Agent and Contact Center show up as distinct revenue drivers, rather than just retention tools?
- Analyst Q&A has repeatedly pressed management on this, and it will remain a focus in future calls. [43]
- Share repurchases and capital allocation
Zoom expanded its buyback authorization by $1 billion, bringing cumulative repurchases under the current plan to 32.5 million shares so far. The pace and timing of additional repurchases will affect per‑share earnings and support for the stock. [44] - Competitive positioning and Gartner/enterprise recognition
Zoom was recently named a leader in the 2025 Gartner Magic Quadrant for UCaaS, while RBC and others continue to highlight its strength in enterprise communications. Continued wins in analyst reports, RFPs and marquee customer logos will be a key sentiment driver. [45]
Bottom line: ZM stock at the end of 2025
As of December 7, 2025, ZM stock sits in a delicate balance:
- Financially, Zoom is highly profitable with excellent cash flow, a strong balance sheet, and sizeable buybacks.
- Strategically, it is leaning hard into AI — from AI Companion to GPT‑5‑powered virtual agents — in an effort to re‑accelerate growth and cement its role as an AI‑first collaboration and customer‑experience platform.
- On Wall Street, opinion is divided but not hostile: consensus is roughly “Hold with modest upside”, with some houses arguing for meaningful long‑term re‑rating and others warning that slow growth and fierce competition cap the upside. [46]
For investors and traders following ZM, the story going into 2026 is less about pandemic nostalgia and more about a simple, testable question:
References
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