Needham Jumps Aboard Video Chat Stock Amid Pandemic

Calls are popular today too

Assistant Editor
Mar 17, 2020 at 11:03 AM
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Zoom Video Communications Inc (NASDAQ:ZM) is attracting attention with its invaluable video conferencing technology amidst the "social distancing" and quarantine trends triggered by the coronavirus pandemic. With that in mind, Needham initiated coverage on ZM with a "buy" rating and a $140 price target. The communication platform has become even handier for businesses and instructors as software name Panopto pushed for Zoom sessions to be easily recorded and shared. ZM is down 1% to trade at $106.75 at last check.

ZM has steady support from its 30-day moving average and touched a record high of $129.83 on March 5. The equity is up 58.5% year-to-date, but there still remains room for bull notes to enter the ring. Coming into today, 10 out of 18 covering firms sport a tepid "hold," and one sports a "strong sell." 

In the options pits, calls heavily outweigh puts. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 1.88 calls have been bought for every put in the last 10 days. This afternoon, 11,000 calls have crossed the tape so far, compared to only 4,000 puts, with the March 115 call the most popular. 

In the last two reporting periods, short interest has risen 40.4% to 11.61 million shares, making up 36.1% of the stock's available float. At the equity's average pace of daily trading, it would take just over two days for shorts to buy back their bearish bets.

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