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ZoomInfo (NASDAQ:ZI) stock closed over 14% lower yesterday after it printed a new all-time low earlier in the day. The selloff occurred after the company’s CFO, Cameron Hyzer, discussed the business trends at an RBC conference.
Hyzer said ZoomInfo continues to experience macroeconomic pressure and scrutiny from buyers in this quarter, causing shares to drop nearly 30% initially.
“We don’t see any evidence currently that that macroeconomic pressure is going to subside or turnaround quickly in the short term,” Hyzer said.
Moreover, he said it is “prudent” to think of 4-5% sequential revenue growth in each quarter of 2023. Bloomberg’s data shows analysts are expecting revenue growth of 26% for the next year.
Here’s how ZoomInfo analysts are interpreting these comments.
Stifel analysts (cut PT to $40 from 50): “One thing that remains unclear is whether the company will look to drive a greater level of margin expansion in 2023 in response to lowered growth expectations. Management has been clear in the past that margin expansion is a guiding philosophy of the business, and that it would be reasonable to expect that when growth slows.”
UBS analysts (cut PT to $37 from $48): “We believe the focus will be on whether this outlook is de-risked, which we need to vet further in checks as the implied 4QF22 DBNR pressure is worse than recent customer conversations suggested.”
Deutsche Bank analysts (cut PT to $40 from $60): “Why we remain Buy rated? While difficult to defend with the stock now trading at 24x EV/uFCF (DBe 2023) vs. an implied high teens revenue growth rate, we truly believe ZI is uniquely positioned in a world where enterprise selling is in the early phases of a secular shift from art to science. Accordingly, we are modeling a rebound to mid-20% revenue growth in FY24/25, which can prove conservative barring the macro environment.”
Truist analysts: “This would reflect a much more material growth slowdown than many expect, especially considering the strategic value of the category and company-specific growth catalysts in play.”
