Zoom (NASDAQ:ZM) stock is slipping on Tuesday after Citi analyst Tyler Radke hit the company with a downgrade.
This has the Citi analyst dropping ZM stock from its previous “neutral” rating to a new “sell” rating. To put that in perspective, the current consensus rating for ZM shares is “hold.” That comes from 14 “buy” ratings, 15 “hold” ratings, as well as a single “sell” rating.
It’s also worth noting that Radke has a $91 price target for ZM stock. That’s below the company’s closing price of $113.23 on Monday. It’s also a far cry from the analyst consensus price prediction of $160.34 per share.
So why is Radke taking such a bearish stance on ZM stock today? He said the following in a note to investors obtained by Yahoo! Finance.
“Our recent survey work, conference takeaways and web traffic tracking suggests that headwinds are beginning to pile up. This includes slower IT budgets with significant de-prioritization of UCaaS [conferencing as a service] and collaboration software, rising competition from Teams, while web traffic trends suggest significant declines y/y (-40%+ year over year). Zoom’s Online business looks particularly at risk, with 48% annualized churn rates in a good economic environment.”
It’s also worth mentioning that this downgrade comes shortly before Zoom is set to release its latest earnings report. The company will release results for the second quarter of fiscal 2023 after markets close on Aug. 22.
ZM stock is down 7.9% as of Tuesday morning.
There’s more recent stock market news worth checking out below!
InvestorPlace is home to all of the stock market news traders need to know about for Tuesday! That includes why Walmart (NYSE:WMT) stock is rising, this morning’s biggest pre-market stock movers, and more. You can find all of that at the following links!
