Zoom Video Stock Pushes Higher on Guggenheim Note

Call buying has picked up Zoom Video, too

by Josh Selway

Published on Nov 22, 2019 at 10:19 AM

Remote conferencing specialist Zoom Video Communications Inc (NASDAQ:ZM) has seen its stock struggle in recent months, hitting fresh lows near $60 a month ago. But while the 50-day moving average was seemingly set to act as resistance, marking a top in yesterday's session, the shares are trading 2.9% higher today at $71.96 after Guggenheim gave the security bullish attention.

In a note this morning the brokerage firm wrote about its belief in Zoom Video's business model, saying it sets the stage for an "extraordinary growth rate." The analyst began coverage with a "buy" rating and $90 price target, a 25% premium to current levels. ZM, which began trading publicly back in April, climbed as high as $107.34 back in June.

Most other analysts remain on the fence, with nine of the 15 in coverage handing out "hold" or "strong sell" ratings. However, sentiment in the options pits has been bullish. Data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 3.67, showing almost four long calls crossing for every put in the past two weeks. Peak open interest in the front-month December series is at the 70 call.

Similarly, short interest has been declining fast on the stock, suggesting some see a move higher on the horizon. In just the past two-week reporting period, short interest fell by 42.4%.


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