Bank of America recently revised its price target for ZoomInfo (ZI, Financial), increasing it from $8 to $9, while maintaining an Underperform rating on the company's shares. This adjustment follows the sales enablement software provider's impressive first-quarter performance, with both revenue and non-GAAP operating income exceeding market expectations.
Despite this positive outcome, management has introduced additional caution into their 2025 projections due to ongoing macroeconomic uncertainties. While this move could help mitigate potential risks, the firm warns that the anticipated negative growth in the latter half of the year may weigh on the stock's performance compared to its front-office software peers. Investors are advised to watch for a solid upward shift in revenue growth for a more favorable outlook.
It was also announced that ZoomInfo has updated its ticker symbol from "ZI" to "GTM" alongside the release of their Q1 earnings report.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 22 analysts, the average target price for ZoomInfo Technologies Inc (ZI, Financial) is $11.05 with a high estimate of $17.24 and a low estimate of $6.00. The average target implies an upside of 7.15% from the current price of $10.31. More detailed estimate data can be found on the ZoomInfo Technologies Inc (ZI) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, ZoomInfo Technologies Inc's (ZI, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for ZoomInfo Technologies Inc (ZI, Financial) in one year is $22.07, suggesting a upside of 114.06% from the current price of $10.31. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the ZoomInfo Technologies Inc (ZI) Summary page.
ZI Key Business Developments
Release Date: May 12, 2025
- GAAP Revenue: $306 million for Q1 2025.
- Adjusted Operating Income: $101 million, with a margin of 33%.
- Net Revenue Retention: Improved, rounding to 87% for the second consecutive quarter.
- Customers with ACV over $100,000: 1,868 customers, a sequential increase of 1 and a year-over-year increase of 108 customers.
- Upmarket Business Growth: Grew 3% year over year, representing 71% of the business.
- Operating Cash Flow: $119 million in Q1.
- Unlevered Free Cash Flow: $125 million, a margin of 41%.
- Share Repurchases: 8.6 million shares repurchased at an average price of $11.05, totaling $95 million.
- Cash and Debt: $143 million in cash, cash equivalents, and investments; $1.24 billion in gross debt.
- Q2 2025 Revenue Guidance: $295 million to $298 million.
- Full Year 2025 Revenue Guidance: $1.195 billion to $1.205 billion.
- Adjusted Operating Income Guidance for Full Year 2025: $426 million to $436 million, with a 36% margin at the midpoint.
- Non-GAAP Net Income Guidance for Full Year 2025: $0.96 to $0.98 per share.
- Unlevered Free Cash Flow Guidance for Full Year 2025: $420 million to $440 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ZoomInfo Technologies Inc (ZI, Financial) delivered better-than-expected financial results for Q1 2025, with GAAP revenue of $306 million and adjusted operating income of $101 million, both above guidance.
- The company has successfully expanded its go-to-market intelligence platform, integrating sophisticated AI-powered applications to enhance customer revenue growth.
- ZoomInfo Technologies Inc (ZI) reported a sequential and year-over-year increase in customers with more than $100,000 in ACV, marking the fourth consecutive quarter of improvement.
- The company has seen strong traction with its Copilot product, which is expanding beyond SDR prospecting into account executive and account manager use cases.
- ZoomInfo Technologies Inc (ZI) has launched Go-To-Market Studio, enabling revenue leaders to unify go-to-market data and leverage AI for more effective targeting and execution.
Negative Points
- Despite strong financial performance, the company has added an incremental layer of caution to its guidance due to the uncertain economic environment.
- Net revenue retention remains at 87% for the second consecutive quarter, indicating room for improvement in customer retention.
- The downmarket segment of the business continues to decline, with a 10% year-over-year decrease in Q1 2025.
- The company is experiencing a shift in business mix, with a focus on moving upmarket, which may involve higher customer acquisition costs.
- ZoomInfo Technologies Inc (ZI) has not seen significant changes in customer behavior, but remains cautious about potential impacts from the broader economic environment.
