Zoom Video (ZM) is expected to report results on its third quarter on Monday, November 21, with a conference call scheduled for 5:00 pm EDT. What to watch for:

NEUTRAL-TO-CAUTIOUS INTO Q3: In a research note ahead of quarterly results, Morgan Stanley analyst Meta Marshall said that he leans neutral-to-cautious on Zoom Video into Q3 given FX/direct headwinds, and ongoing impact for the next couple of quarters, despite continued positive trends on enterprise business. The analyst remains constructive on the long-term opportunity. Marshall further noted that the recent strength in the name is likely a factor of share repurchases and read-through from reactions in similarly suppressed Comm Software valuations. He has an Equal Weight rating on the name, with a price target of $90 on the shares.

TARGET CUTS AHEAD OF EARNINGS: Baird analyst William Power lowered the firm's price target on Zoom Video to $100 from $125, while keeping an Outperform rating on the shares. The analyst previewed the quarter and given weaker outlooks for most of the UC space, he lowered his Q4 and 2024 estimates modestly to reflect greater macro impacts while noting there are clearly still near-term revenue risks, and sentiment is also negative creating cross-currents.

Bearish on the stock, Citi analyst Tyler Radke lowered the firm's price target on Zoom Video Communications to $72 from $76 and maintained a Sell rating on the shares. Zoom's post-COVID recovery may continue to falter in Q3 as tightening IT budgets and a weaker macro-outlook keep new customer acquisitions low and churn elevated, Radke told investors in a research note on Wednesday. The analyst sees the company's "hurdles" from last quarter holding, with rising competition, macro-related weakness, and further margin risk from mix shift. Though Phone is gaining traction, headwinds will more than offset new product strength and create downside risk to guidance and consensus estimates post Q3, Radke contended.

OUTLOOK: During the company’s last earnings call, Zoom Video said it saw third-quarter earnings per share of 82c-83c and revenue of $1.095B-$1.1B, with consensus at 84c and $1.1B, respectively. The company also said it saw full year 2023 earnings per share of $3.66-$3.69 and revenue of $4.385B-$4.395B, with consensus at $3.70 and $4.4B, respectively.

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