Shares of Zoom Communications Inc (ZM  ) continued to rally in early trading on Friday, after the company Thursday reported upbeat first-quarter results.

Here are the key analyst insights:

  • Rosenblatt Securities analyst Catharine Trebnick maintained a Buy rating, while raising the price target from $115 to $130.
  • BTIG analyst Allan Verkhovski reiterated a Buy rating, while lifting the price target from $100 to $125.
  • Needham analyst Joshua Reilly maintained a Buy rating, while raising the price target from $100 to $130.
Rosenblatt Securities: Zoom Communications delivered a "clean" beat-and-raise quarter, with total revenue up 5.5% year-on-year to $1.24 billion, topping consensus by around $14 million, Trebnick said in a note. The company's non-GAAP operating margin expanded 130 basis points (bps) to 41.1%, taking its pro forma earnings to a higher-than-expected $1.55 per share, she added.

The first-quarter results reflected AI adoption and new product momentum, with meaningful monetization of AI Companion, the analyst stated. AI Companion paid MAUs (monthly average users grew 184% year-on-year, "driven by strong adoption of AI Companion 3.0 capabilities that extend well beyond meeting summaries into agentic retrieval and workflow orchestration," she further wrote.

BTIG: Zoom Phone and Contact Center reflected continued lower trends in year-over-year churn, "given fewer large competitive takeouts," Verkhovski said. Zoom Customer Experience, which included Zoom Contact Center) continued to accelerate, posting high-double-digit growth, with paid AI included in nine of the top 10 deals, he added.

Zoom Phone ARR (annual recurring revenues) continued to grow in the mid-teens, the analyst stated. Management raised its fiscal 2027 total revenue guidance by $8 million, implying 4.1% growth versus its prior projection of 3.9%, he further noted.

Needham: Zoom Communications reported solid results, with revenues and earnings ahead of estimates, Reilly said. He added that the positives included:

  • Zoom Phone's continued mid-teens growth.
  • Trend of convergence of UCaaS (unified communications as a service) and CCaaS (contact center as a service).
  • AI cross-sell trends gaining momentum.
The "very strong" trends for non-current RPO (remaining performance obligations) suggests that "customers are buying more products with longer contract durations," the analyst wrote. This indicates that Zoom Communications would likely be able to sustain mid-single-digit revenue growth for the next several years, he further stated.

ZM Price Action: Zoom Communications shares were up 12.05% at $108.40 at the time of publication on Friday. The stock is approaching its 52-week high of $111.56, according to Benzinga Pro data.