ZoomInfo stock forecast as shares spike after guiding Q4 revenue above estimates

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Nov 2, 2021
  • ZoomInfo shares on Tuesday spiked more than 4% before pulling back for a net gain of 2.57%.
  • The company reported its most recent quarterly results Monday after market closed, beating expectations.
  • ZoomInfo also issued its FQ4 2021 revenue guidance above the Street forecast.

On Tuesday, ZoomInfo Technologies Inc. (NASDAQ:ZI) shares advanced 2.57% after announcing its most recent quarterly results. The stock had spiked more than 4% in the early morning hours.

The software infrastructure provider reported its FQ3 revenue and earnings Monday after markets closed, beating analyst expectations.

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ZoomInfo posted FQ3 non-GAAP earnings per share of $0.13, narrowly outperforming the consensus Street estimate of $0.12. On the other hand, its GAAP EPS of -$0.15 missed the average for analyst estimates of $0.05, while revenue for the quarter soared more than 60% from the same quarter in 2020 to $197.6 million, surpassing the Street forecast by $13.79 million.

In addition, ZoomInfo issued FQ4 revenue guidance in the range of $206 million to $208 million, significantly above the average Street forecast of $195.4 million.

ZoomInfo’s exciting outlook

From an investment perspective, ZoomInfo shares trade at a steep trailing 12-month P/E and forward P/E ratio of 269.13 and 100.97, respectively. Therefore, value investors could opt for alternatives in the market. 

However, with analysts expecting its earnings per share to grow by more than 53% this year, before rising at an average annual rate of about 39% over the next five years, the stock could be a compelling option for growth investors.

Source – TradingView

Technically, ZoomInfo shares seem to be trading within an ascending channel formation in the intraday chart.

The stock recently bounced off the trendline support to retest the trendline resistance before retreating to the median point.

Therefore, with shares yet to reach overbought conditions, investors could target extended gains at about $73.15, or higher at $77.08, while $66.61 and $62.57 are crucial support levels.

Is it safe to buy ZoomInfo stock?

In summary, although ZoomInfo shares trade at steep valuation multiples, thus making the stock less attractive to bargain hunters, its growth prospects could be exciting to growth investors.

Therefore, with shares yet to reach overbought conditions, it could be a perfect time to invest in the software infrastructure company.

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