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Zoom Video Rebounds From Recent Drop; Mizuho Bullish

Mizuho maintained its buy rating on Zoom Video, but cut its price target significantly as multiples have shrunk in the high-growth software sector.
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Shares of Zoom Video  (ZM) - Get Zoom Video Communications Inc. Report got a boost Friday from a mostly bullish note from analysts at Mizuho who maintained their buy rating, but also lowered the company's price target. 

Zoom shares fell as much as 8% in the last two trading sessions, but the stock rebounded nicely Friday, climbing 5.6% to $306.46 Friday afternoon. 

"Heading into FQ1 results, we expect Zoom to deliver outsized top-line growth driven by better-than-expected renewals/retention, strong enterprise expansion and ARPU growth from cross/up-sell highlighted by Zoom Phones and Zoom Rooms," said Mizuho analyst Siti Panigrahi in a note.

The firm maintained its buy rating, but did significantly lower its price target to $400 per share from $550 per share as the firm has seen price multiples contracting recently in the high-growth software sector. 

Zoom shares are down nearly 50% from their 52-week high as the stock has steadily declined since October. Before that, the work-from-home movement that was made necessary by the global coronavirus pandemic had boosted shares significantly.

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Big employers have had mixed reactions to bringing workers back into the office. 

Last week, Alphabet's  (GOOGL) - Get Alphabet Inc. Report Google said that employees can continue to work remotely through September.

"We expect that the future of our company will be a hybrid model, where around 60% of Googlers are coming together with teams in the office a few days a week, another 20% are working in new office locations, and 20% are working from home," a Google spokesperson said. 

Meanwhile, JPMorgan will allow 10% of U.S. employees to work from home full-time. 

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