On Tuesday, Jefferies made a positive adjustment to its outlook on ZoomInfo Technologies (NASDAQ:ZI), raising the price target from $20.00 to $24.00 while maintaining a Buy rating on the stock. The firm’s analysis indicates that ZoomInfo’s recent performance has surpassed expectations, with the company’s 2024 guidance exceeding the predictions of many, despite a broad range of forecasts.
The company’s strong results were attributed to a variety of positive developments. Notably, there was a surge in new sales in December, and the sales cycle has shortened. Additionally, the Net Revenue Retention (NRR) rate has shown signs of stabilization, and there has been a significant increase in the number of “boomerang” customers—those who have returned after previously leaving.
Jefferies’ decision to raise the price target comes after considering these factors, which suggest that ZoomInfo’s business fundamentals might be reaching a turning point. The firm’s revised estimates reflect an uptick in revenue, although this is partially counterbalanced by a forecast of lower margins.
The analyst from Jefferies emphasized the robustness of ZoomInfo’s recent performance and the company’s positive outlook. The statement from the analyst read, “Results were notably better than anticipated, with 2024 guidance above most expectations on what was a wide range. Upbeat commentary on new sales in December, a shortening of the sales cycle, stabilization of NRR, and a large number of customers returning as boomerangs suggest fundamentals may be approaching a bottom. Our estimates increase slightly on higher revenues partially offset by lower margins. Reiterate Buy.”
The recent update from Jefferies on ZoomInfo Technologies (NASDAQ:ZI) has been echoed by the data and insights available on InvestingPro. According to InvestingPro, the company’s net income is expected to grow this year, which aligns with the positive outlook and the raised price target from Jefferies. This anticipated growth is underpinned by ZoomInfo’s impressive gross profit margins, which were reported to be at a high 88.5% for the last twelve months as of Q3 2023.
InvestingPro Data further reinforces the company’s strong financial position, with a market capitalization of $6.24 billion and a significant revenue growth of 20.22% for the same period. The company’s operational efficiency is evident with an operating income margin of 20.67%, and the data also highlights a…