Analyst: Snag Zoom Stock on the Dip

The stock got a rare double upgrade this morning

Digital Content Manager
May 31, 2022 at 10:36 AM
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Zoom Video Communications Inc (NASDAQ:ZM) just received a double upgrade from Daiwa Securities to "outperform" from "underperform." The analyst noted that the recent tech pullback provides a "good entry point' for investors looking to buy into the stock, adding that growth expectations for Zoom Video are now more realistic. 

Despite the upgrade, Zoom stock is sinking with the broader market, last seen down 3.1% at $107.05. The shares are still headed for an 8.4% win in May, thanks in part to last week's impressive 23% burst fueled by a post-earnings bull gap. For the year, ZM has shed 41.3%, with pressure at the 80-day moving average containing the most recent breakout.

Most members of the brokerage bunch were hesitant on Zoom stock coming into today. Of the 22 in coverage, 14 said "hold," compared to eight "buy" or better ratings. Meanwhile, the 12-month consensus price target of $176.82 is a 65.3% premium to current levels. 

Short-term options traders, meanwhile, have been incredibly put-biased, and an unwinding of pessimism here could help Zoom stock bounce. This is per the equity's Schaeffer's put/call volume ratio (SOIR) of 1.14, which sits higher than 92% of readings from the past year. 

Options are an intriguing route, considering ZM sports a Schaeffer's Volatility Scorecard (SVS) rating of 82 out of a possible 100. This implies Zoom has tended to outperform options traders' volatility expectations of late -- a boon for call buyers. 

 

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