The move came after Zoom passed 1 million seats sold.
The firm rates Zoom outperform with a $610 price target. It is optimistic that revenue from its Zoom Phone will contribute substantial returns in a shorter period than many investors expect, according to Bernstein analyst Zane Chrane.
Zoom Phone is a cloud phone service built into the Zoom platform. The company introduced the business two years ago.
Shares of the San Jose, Calif., company at last check were rising 2.2% to $391.58. The price target indicates about 56% potential upside for the shares.
"As Zoom Phone users are all on paid plans (i.e., no free tier like with videoconferencing), we should see related revenue grow much more rapidly relative to the user count than has been the case with Zoom VC," the analyst wrote.
"Such a growth trajectory would yield about $4 billion in annual recurring revenue by the end of calendar year 2023, at which point Phone should still be growing top line about 50% year over year."
The firm estimates Zoom Phone could reach more than 8 million paid users by the end of calendar year 2022 and 13 million by the end of 2023.
With a multiple of 20 times price to sales, Zoom Phone would have a market value of $80 billion by 2023.
"Zoom has been focusing on building out adjacent solutions for a little while now, and we believe we will see payoff in 2021," Chrane said.
Zoom Phone "is the first major step in an expansion to becoming a comprehensive [unified communications as a service] platform."
The firm named Zoom Phone, Zoom Rooms (conference rooms), OnZoom (event platform), and Zoom Chat as those adjacent solutions.