Shares of Zoom Video Communications (ZM) – Get Report rose after Mizuho analysts initiated coverage of the videoconferencing company with a buy rating and a price target of $550 a share.
The target represents 15% potential upside from the stock’s Thursday closing price. Zoom shares at last check rose 2% to $487.92.
“Zoom’s meteoric rise during covid-19 has been driven by uptake of its best-of-breed videoconferencing tool, which became a global sensation almost overnight,” analyst Siti Panigrahi said.
Year to date Zoom shares have jumped by more than a factor of seven as the work-from-home trend that had begun prior to this year accelerated because of the coronavirus pandemic and the subsequent lockdowns.
Zoom “can continue to deliver outsized revenue growth due to its position as a market leader, its global recognition, cross-sell opportunities, and its position in a growing and underpenetrated long-tail market,” the analyst wrote.