Karl Keirstead, UBS analyst, reiterated his Neutral rating. Zoom Video Communications (NASDAQ) and decreased the target price to $100.00 per unit from $130.00 prior to earnings next week.

An online survey of approximately 400 IT decision-makers on Zoom did not yield enough evidence to give Keirstead a Buy rating. These are the three main takeaways of this survey:

Sixty-five percent of respondents stated that Zoom would have a 5% to 5% increase in their spending by 2022, while 85% said it would grow at 15%. Keirstead points out that there is very little upside to this guidance.

92% said that they are considering consolidating their video conferencing tools. 67% stated they plan to do this in the next twelve months. Microsoft Teams was the most popular choice (NASDAQ:), with Zoom second.

Zoom Phones’ spending intention data and Zoom Rooms’s purchasing intentions showed that they were not yet material growth drivers.

On valuation, the analyst said that multiples are “washed-out and close to a bottom” after a major selloff.

“While in our view this makes the near-term stock set-up better for Zoom than for DocuSign (NASDAQ:), we’re still held back by a) these UBS Evidence Lab survey results, which didn’t point to material revs upside and b) our view that the FY23 revs guide is not a slam dunk and if growth falls short, Street FCF estimates might also be at risk,” the analyst concluded.

By Senad Karaahmetovic