Keith Weiss, Morgan Stanley Analyst is optimistic on Zoom Video Communications (NASDAQ: ) Prior to the Q1 Print

While the analyst maintained an Overweight rating, he lowered his price target from $165.00 to $140.00 per share. Weiss argues that the current valuation (shares down nearly 50% YTD), has built-in “too much skepticism on growth.”

“We see FQ1 earnings as a catalyst to disprove the overly bearish sentiment on ZM around FY23growth. Because contracts that were signed during COVID’s early stages are now valid for one year. That will allow Enterprise customers to be retained better. Despite customers choosing to use Teams for collaboration, our quarter-end UCaaS checks revealed that licenses for video conferencing aren’t being cancelled. Our survey work also shows a similar dynamic, as video conferencing is key to future workplace strategies (see our recent Return to Office Survey) and most CIOs intend to maintain multiple video licenses due to different employee preferences and use cases (see our recent CIO Survey),” Weiss said in a client note.

“We could be too optimistic if the

Zoom stock was closed Friday at $94.84.

By Senad Karaahmetovic