Zoom Stock Is Rising After Earnings. Here’s What Wall Street Is Saying.

Zoom Communications reported better-than-expected second-quarter earnings and revenue. (Dreamstime)

Shares of Zoom Communications were rising sharply Friday after the video-conferencing company posted better-than-expected quarterly earnings and revenue.

Zoom reported adjusted earnings of $1.53 a share for the second quarter, beating Wall Street consensus estimates of $1.38. Revenue totaled $1.22 billion, up 4.4% from a year before in constant currency and above analysts’ forecasts of $1.2 billion.

Zoom shares were climbing 10% to $80.78 Friday. The stock, which was a pandemic darling at the height of remote work, remains down around 85% from its all-time closing high on Oct. 19, 2020, according to Dow Jones Market Data.

Wall Street saw the print as positive and bought shares accordingly. But analysts remain conflicted about the stock’s long-term outlook. Among the bulls, Benchmark Equity Research analyst Matthew Harrigan reiterated a Buy rating and a $102 price target on the stock, citing the uptake of the company’s artificial-intelligence offerings.

“AI is integrating into Zoom’s namesake video conference product, as well as increased contact centre capability and especially hybrid work solutions,” Harrigan wrote in a research note Friday. “These reduce costs for clients.”

Cantor Fitzgerald’s Thomas Blakey, who reiterated a Neutral rating and a target price of $87, praised the strong quarter overall as well as the company’s increased guidance for the remainder of the fiscal year. Revenue in constant currency is now expected to total between $4.82 billion and $4.83 billion, up $9 million on either side from earlier forecasts.

The guidance wasn’t as positive as it sounded, argued Jackson Ader of KeyBanc Capital Markets. The $9 million bump was less than the revenue beat the company posted in the second quarter, meaning its second-half outlook declined, he argued. KeyBanc maintained an Underweight rating and cut its price target to $69 from $73.

“For how positive the commentary and the characterization of the outlook sounded, bottom-lining the numbers with a second-half cut just didn’t seem to fit the puzzle,” Ader wrote.

Write to Nate Wolf at nate.wolf@barrons.com