Shares of Zoom Video (ZM) - Get Zoom Video Communications (ZM) Report rose early Friday after JPMorgan upgraded the videoconferencing provider to overweight from neutral, saying the price already reflects a post-pandemic slowdown in remote video communication.
Shares of the San Jose, Calif., company at last check rose 2% to $280.31.
JPMorgan analyst Sterling Auty affirmed the price target on Zoom Video at $385 a share.
"The stock is down over 33% since Dec. 9, 2020, as investors have factored in the growth slowdown post the pandemic tailwinds," Auty told investors in a research note.
Auty added that Zoom Video's growth will bottom in the fourth quarter and then accelerate due to increasing adoption by businesses.
The market has priced that into the current stock price, creating a "more attractive" risk/reward profile, he said.
The investment firm expects Zoom Video to be the "other big winner" in the enterprise unified communications as a service market along with Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report Teams.
The merger plan was “terminated by mutual agreement” between the two companies.
Eric Yuan, chief executive at Zoom Video, said in a statement that while the company had looked forward to the potential partnership, “financial discipline is foundational to our strategy.”
At the end of August, Zoom's fiscal-second-quarter profit rose to about $317 million from about $186 million a year earlier, while revenue reached $1.02 billion, up from $663.5 million.
Zoom's quarterly revenue surpassed $1 billion for the first time in the company’s history.