By Emily Dattilo
Shares of ZoomInfo Technologies plummeted Wednesday after the company's cut to guidance overshadowed its strong quarterly results.
ZoomInfo stock dived 23% to $12.30, on track for its largest one-day percentage decline since Aug. 1, 2023, when it dropped 27%, according to Dow Jones Market Data.
On Wednesday, the provider of databases of customer contact information said for fiscal year 2024, it now expects revenue between $1.255 billion and $1.27 billion, from its previous range of $1.26 billion to $1.28 billion. Analysts had penciled in $1.26 billion. The company boosted its forecast for adjusted earnings.
The forecast left Mizuho Securities analysts led by Siti Panigrahi concerned, prompting the team to downgrade shares to Neutral from Buy and lower their target price to $14 from $23.
"In our view, ZI's cut to 2024 guidance continues its pattern of downward estimate revisions since the start of 2023, and presents concerns over management's visibility into the renewal trends of the business," they wrote.
Needham analysts led by Joshua Reilly were a bit more optimistic, however. They said the new forecast suggests an reacceleration in the second half of the year and that investors should pay close attention to the macroeconomic environment to determine if the company can deliver on its guidance in the second half of the year. The team maintained its Buy rating and $25 price target, arguing that "trends are set to reverse" in calendar year 2025.
Raymond James analysts led by Brian Peterson also kept their Buy-equivalent rating, but trimmed their price target for the stock to $18 from $24.
"We're cognizant that tech end-market exposure and competitive concerns will remain part of the narrative for the foreseeable future, although we see opportunity for ZI to lap these headwinds with potential optionality from AI [artificial intelligence] in the back half of the year," they wrote.
For the first quarter ended in March, ZoomInfo reported adjusted earnings of 26 cents per share, beating Wall Street's call for 23 cents, according to FactSet. Revenue of $310.1 million was also above the consensus call for $308.8 million.
For the second quarter, the company expects adjusted earnings per share between 23 cents and 24 cents and revenue of $306 million to $309 million, while analysts expect per-share earnings of 24 cents and sales of $308.7 million.
Write to Emily Dattilo at emily.dattilo@dowjones.com
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(END) Dow Jones Newswires
May 08, 2024 10:22 ET (14:22 GMT)
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