ZM NDR - Tonight I'm Gonna Party Like It's 1999!

Research evidence excerpt

ZM NDR - Tonight I'm Gonna Party Like It's 1999!

July 15, 2026

Investment Conclusion

ZM shares have outperformed IGV YTD, up 10% vs. IGV down 9%, and remain among the better performers in our

coverage.

This NDR reinforced our view that ZM's growth is set to re-accelerate, and management gave us a clearer, more

coherent roadmap than ever for how it gets there. The framework is a simple AI-driven growth formula: AI reducing

churn in the core, sustained share gains in Zoom Contact Center (high-double-digit and accelerating) and Zoom

Phone (mid-teens), and net-new vertical (ZRA and Common Room) and horizontal (Zoom Mate) AI products. On

top of that, Enterprise discount discipline is emerging as a real and underappreciated pricing lever, and the newly-

articulated Voice API ambition (a potential "new ElevenLabs") is a genuinely incremental revenue opportunity not in

any numbers today.

Despite this improving setup, ZM trades at ~10x CY27 FCF, a discount to other non-security, cash-generative

software companies growing at high-single-digit to low-double-digit rates, which trade closer to ~11-12x. In

our view this continues to underappreciate ZM's platform expansion, Voice AI optionality, and improving growth

durability, and as confidence in these drivers builds we believe ZM is positioned for both earnings growth and

multiple expansion. We reiterate Outperform with a $125 price target, based on ~15x CY27 FCF.

Key Themes

System of Action. Eric's key strategic message was that Zoom's next chapter is a move from a "system of

engagement" to a "system of action", turning conversations into work completion. Eric noted that their focus is to

enable ZM's agents to act on information generated in conversations by humans and make action within systems

(e.g. updating CRM).