- ZoomInfo Technologies ( NASDAQ: ZI ) fell 5.8% on Wednesday after Bank of America downgraded the stock to Neutral from Buy as persisting demand headwinds will likely impact its revenue growth profile well into 2023.
- The research firm noted the company's attractive customer engagement platform and potential to gain share over the long term.
- "However, the macro-affected demand environment led to in elongating sales cycles, resulting in the business shifting go-to-market capacity away from demand generation to drive cross-sell and upsell activity," said analyst Koji Ikeda.
- He added that 4Q22, 1Q23 and 2Q23 represent tough growth comps due to inorganic revenue contributions from Chorus.ai and other acquisitions, which may create tough optics.
- BofA lowered its price target on ZoomInfo ( ZI ) to $34 from $35 (15.5% potential upside to last close), implying an EV/C23e FCF multiple of 33.4x, which is a discount to horizontal software peers at 37.8x.
- The research firm's Neutral stance contrasts bullish sell-side ratings , but is in line with SA Quant's Hold rating .
- But SA author Ben Alaimo is of the view that ZoomInfo ( ZI ) is undervalued intrinsically .
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ZoomInfo cut to Neutral at BofA amid demand headwinds, stock falls over 5%