Zoom Stock Moves Higher Thanks to Mizuho Praise

The equity is up a jaw-dropping 603.3% this year

Digital Content Manager
Oct 9, 2020 at 9:43 AM
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The shares of Zoom Video Communications Inc (NASDAQ: ZM) are up 1.5% at $485.70 this morning, after Mizuho initiated coverage of the security with a "buy" rating and a $550 price target. The analyst in focus praised Zoom for its high-quality video conferencing tools, which were responsible for the security's rise during the coronavirus pandemic, and said that the company will continue to deliver outsized revenue growth due to its position as a market leader, global recognition and cross-selling opportunities.

On the charts, Zoom stock has experienced unprecedented growth over the past several months. Shares first started to surge in early February, nabbing record highs on a nearly monthly basis to reach an all-time-high of $529.74 on Sept. 23, which is more than six times this year's pre-pandemic levels. And while the security is now fighting overhead pressure at the $500 mark, it still sports a jaw-dropping 603.3% lead.

Analysts were mostly optimistic towards the equity coming into today, with 12 of the 21 in question sporting a "buy" or better rating, and nine carrying a tepid "hold" or worse. However, the 12-month consensus target price of $421.35 is a 13.7% discount to current levels, meaning more price-target hikes could be in store for ZM in the near future.

Short sellers have been hitting the exits lately, too. Short interest dropped 11.5% in the last two reporting periods, though the 8.16 million shares sold short still make up 25.5% of the stock's available float.

In the options pits, however, traders are much more pessimistic, with puts popular. This is per ZM's Schaeffer's put/call open interest ratio (SOIR) of 1.17, which sits in the 81st percentile of its annual range -- meaning short-term options traders have rarely been more put-biased. 

Lastly, the equity's Schaeffer's Volatility Scorecard (SVS) ranks at 89 out of a possible 100, implying that ZM has tended to exceed volatility expectations in the past year -- a boon for option buyers. 


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